Another way of looking at it: Shorting is (roughly given efficient market assumptions) equivalent to buying a put and selling a call at the same strike. If the

Another way of looking at it: Shorting is (roughly given efficient market assumptions) equivalent to buying a put and selling a call at the same strike. If the stock has no chance of going up a lot, the call will be relatively cheap, and so selling the call won't change much. Edit: on the other hand if it has low volatility in both directions, then both are cheap, and it's a bit more complicated. Buying the put will be cheaper, but shorting will also require less margin because the margin provider will have less risk. (See e.g. http://openmarkets.cmegroup.com/3785/understanding-margin-changes http://openmarkets.cmegroup.com/3785/understanding-margin-ch...). This should cancel out in theory, but might not for various reasons like transaction costs.