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I'll take a stab at it. If you're shorting, it's probably on margin (I don't know if they changed it,but it was 50% of what you wanted to borrow) and have other assets to back your short position. In other words, you may have a naked short of xyz stock but own enough abc stock to cover the loss. Margin calls don't happen all that often, but if the broker thinks there may be a problem with the share re-purchase, they will do a margin call and the short seller would be forced to sell other stocks, bonds or assets to cover the loss.

In any event, should the worst possible case happen, the broker will buy back the shares (replacing the borrowed shares used in the short sale) and go after the short seller's assets to cover the loss.

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