4 ms·
What happens with short positions when something like this happens though? The firm is going to be liquidated so where would the shorter buy back the stocks to
by thiscatis 4y ago
What happens with short positions when something like this happens though? The firm is going to be liquidated so where would the shorter buy back the stocks to give back if they haven't exited by now (trading was halted)?
- skmurphy 4y agofrom https://www.investopedia.com/ask/answers/maintain-short-position-delisted-stock/ https://www.investopedia.com/ask/answers/maintain-short-posi... When an investor has a short position in a company that gets delisted and declares bankruptcy the investor never has to pay back anyone because the shares are worthless. The short seller owes nothing. That is the best possible scenario for a short seller. Eventually, the broker will declare a total loss on the loaned stock. At that point, the broker cancels the short seller's debt and returns all collateral.