How Do Short Stock Positions Pay out?

If you are short a stock and it doesn't occur at payout then you will be paid back the amount you spent to open your short position plus the amount between the price you spent and $0. 

For instance, if you shorted 10 shares at $20 a share you would spend $200 to open your short position.  Your payout would then be the $200 plus the difference between your purchase price and $0.  In this case $20 a share would be the difference to capture the profit for a total of $200 profit. In total, $400 Remars would be returned to your account.

If you a short a stock and it occurs then you will lose the money you have bet on the stock.

This is all handled automatically so there is no need to have to cover before payout.