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Re: snack post# 9653

Wednesday, 02/24/2010 2:15:00 PM

Wednesday, February 24, 2010 2:15:00 PM

Post# of 16707
Snack...there is a misconception that if you put your stock for sale shorts cannot avail it. This is only possible if and only if you do not have a margin account.

read below:
http://en.wikipedia.org/wiki/Short_(finance)

Brokerage firms can also borrow stocks from the accounts of their own customers. Typical margin account agreements give brokerage firms the right to borrow customer shares without notifying the customer. In general, brokerage accounts are only allowed to lend shares from accounts for which customers have "debit balances", meaning they have borrowed from the account. SEC Rule 15c3-3 imposes such severe restrictions on the lending of shares from cash accounts or excess margin (fully paid for) shares from margin accounts that most brokerage firms do not bother except in rare circumstances. (These restrictions include the broker must have the express permission of the customer and provide collateral or a letter of credit.)