Let's say I'm sitting short 10 shares of SBUX. The market price is $75/share. I'm paying 2% of your margin account to short these shares to my financial institution. Price starts decreasing...and it falls to $70 per share. What is my next move? Purchase at $70, profit your $50, pay your 2% Purchase at $70, take your hit of $50 and the interest on the margin Exercise your call option of $75 Swing trade for tomorrow, wait for the price to go back up