> I'm curious, what happens if you can't return stock that you've borrowed in order to short it? It's similar to what happens when you can't pay your mortgage.

> I'm curious, what happens if you can't return stock that you've borrowed in order to short it? It's similar to what happens when you can't pay your mortgage. If you are shorting you'll have to put up some margin( cash or cash equivalents representing some percentage of the dollar amount you shorted.) if the short starts to move against you, you'll get a margin call and be required to put up more collateral. Eventually if you can't pay you go bankrupt and your counterparty get's what they can in bankruptcy court. Not surprisingly this is called counterparty risk and has become a big area of focus for risk managers recently.