Of course, you cannot just borrow for free, and a certain amount of collateral has to be given in exchange for this borrowing favour. This is also known as "initial margin" and acts as protection in case the trading market moves in the opposite direction to how the trader anticipates. If the market moves too far in the wrong direction, to the point where the collateral can no longer cover the cost of the position, a trader's position is liquidated so that the borrowed funds are not lost.