4 ms·
Sure. The way to unwind the loans is for the people who loaned them to give them back, and then the people who bought them to sell them back. So shortSeller2 gi
by lazyasciiart 6y ago
Sure. The way to unwind the loans is for the people who loaned them to give them back, and then the people who bought them to sell them back. So shortSeller2 gives back his loaned shares to Buyer. But Buyer sells them back to shortSeller1 - and he doesn't have to sell them back for the same price he bought them, and he doesn't have to sell them to the same person. So he actually sells them to whoever will pay him the most. ShortSeller1 is paying $1/day to borrow the shares, and he sold them for $20. It's 5 days after the sale, and today Buyer1 is asking for $40. ShortSeller1 promised to return the shares after 7 days. What can he do to not lose money?