This is an interesting question.
I short sell 1 stock A at $10 and 1 stock B at $10. Stock A and B are always running in opposite directions. Let’s say after some days stock A is $15 and stock B is $5. If we only consider stock A, it’s likely on margin call. However, my overall account balance does not change as the prices cancell out each other.
Assuming there is no other stocks in the account but only cash.
- What’s the cash required at the beggining to short sell both stock A and B?
- What’s the cash required to maintain the positions when the stocks changed to $15 and $5?