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Re: Future2016 post# 12315

Tuesday, 07/20/2021 4:28:44 PM

Tuesday, July 20, 2021 4:28:44 PM

Post# of 21229
It is unfortunate that the short position in SHWZ was able to be covered prior to the Q2 numbers coming out, it would have been a nice squeeze IMO.

If you have a Margin account they can borrow shares from it, it should be in the user agreement. I have never seen anything definitive about whether putting in sell orders affects it or not.

Here is a little info on short selling:

https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-51

Typically, when you sell short, your brokerage firm loans you the stock. The stock you borrow comes from either the firm’s own inventory, the margin account of other brokerage firm clients, or another lender.



I use TDA and their trading information page on Short Sales states

TD Ameritrade makes shares available for shorting only from margin accounts when margin is being used. If you have a cash account, your shares will never be loaned for short sales.



I always found it a bit insulting that shorts could borrow my shares to use against my position so I only use cash accounts. I wouldn't use Margin even if it was available so it makes little difference to me.

Those using a Margin Account should understand the potential pitfalls. Since it is unlikely anyone actually read the user agreement here is an investor alert from FINRA that I use when teaching about stocks.

https://www.finra.org/investors/alerts/investing-borrowed-funds-no-margin-error

All the best,

Knife




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