Calpine (CPN)

[Stock]

What happens if an investor maintains a short position in a stock of a company that is delisted and declarers bankruptcy?

What does the short seller owe (if anything) to close the position (out of the non-existing stock)?

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The short seller owes nada, nil, zip, or whatever you want to call it.

When you short sell you borrow the shares, sell them on the market, and then collect the proceeds as cash. When you want to get out of the position, you would have to buy back the same number of shares to repay the person (or brokerage) from whom you borrowed them. If you buy back the shares at a price lower than the price at which you originally sold them, you collect the difference, so short selling is a way to profit from a falling stock. But if the company is delisted and bankrupt, you don't have to pay back anyone because the shares are worthless.

Note: This is the best possible scenario for a short seller.

http://www.investopedia.com/ask/answers/03/082803.asp