question on net long/net short position mechanics

I Have perhaps a stupid questions regarding hedge funds net long/ net short exposure.

How can a fund have a zero net long exposure (market neutral) ? Shouldn't they maintain a maintenance margin with their broker for the stock borrowed? Is this just sitting in cash? additionally, if a fund is short only, what do they do with the cash they receive when going short?

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question on net long/net short position mechanics

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