Short account definition
/What is a Short Account?
A short account is the trading account held by an individual who engages in short selling. Short selling involves the borrowing of securities from another investor, selling them on the open market, and then buying them at a later date when the price will presumably be lower, and returning them to the other investor. If the price of the security drops during this period, then the short seller makes money.
A short account is a margin account that is required by regulation to contain the full amount of a short position, plus an additional 50% margin requirement. This arrangement creates collateral that the short seller makes available in case he loses money on his short positions and has to pay out. The brokerage firm with which the account is held may demand a larger fund balance if the short position is losing money.