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Can the value of that IOU drop to zero if the lendee can't return the share, e.g. if lendee no longer holds the share and none are for sale? Does the IOU specif
by neartheplain 6y ago
Can the value of that IOU drop to zero if the lendee can't return the share, e.g. if lendee no longer holds the share and none are for sale? Does the IOU specify alternate restitution in that case?
- cortesoft 6y agoThe broker usually guarantees the stock to the lender, and will sell any other assets the short seller has to cover. A broker isn’t going to let the short seller get in too over their head. While conceivably what you are suggesting could happen, I don’t know if it ever has.