Innovation Pharmaceuticals Inc (IPIX)

[BonelessCat]

For some reason, this fiction will not die. If you have a cash account without margin, any margin privileges, then placing a GTC order might prevent your brokerage from loaning shares for short trading. However, when you opened your account, there were terms of agreement. In the terms of agreement for discounted trading and zero fee trading there was probably a sentence or two stating that they have the right to loan your shares. This is even true today for most IRA accounts.

So, fact is, nearly all trading accounts include terms that state that from time to time the broker has the right to loan out your shares, even if you place a GTC on them. Certainly, if you have anything in any marginable account, your broker is loaning out your shares “from time to time” regardless of what you do until you actually sell your shares. It’s called “held in street name.”