That is one of those common beliefs that circulate on these message boards but it is actually not true.
If you hold your shares in a Margin account they can be loaned out to shorts. Period. Even if there is no margin balance on your account and even if your customer service rep tells you that they are not loaned out.
The only way you can be sure your shares are not loaned is to transfer them to a cash account and leave stick instructions with your broker not to loan them out.
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