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Short Selling How to Short Stocks How to Sell Short

Short Sales: How to Sell Short How to Sell Stocks Short

Selling Short definition | How to short stocks | (Sell Stock Short)

 

How do I Short Stocks, ETFs and REITs?

Procedurally, to sell short, all you need to do is specify your order Action as 'Sell' at the point when you create your order. Click here to learn about the short selling process: How Short Sales Work.

 

Please note that we do not allow you to be both long and short the same security, so if you maintain a long position and enter a sell order, you will close out any long positions to the extent of your sell order and open a short position to the extent, if any, your sell order exceeds a long position.

 

Also note, that in addition to your account having sufficient equity to meet the margin requirement associated with the transaction,

  • PT is required to meet its regulatory obligation of making a reasonable determination that we can locate the stock for borrowing purposes when the transaction settles (typically T+2).
  • If we are unable to locate the stock based on our inventory and the availability lists provided to us by other brokers, you will see an Order Status color in the TWS Shortable column of dark green. This indicates that there are no shares available to sell at the moment and that the system is searching for shares. The order will remain in this status until we are either:
    • able to locate the shares, or
    • the time which you specify for your order to remain in force expires, whichever occurs first.

 

 

 

A list of shortable stocks searchable by symbol or CUSIP along with their indicative borrow rates may be found through the Short Stock Availability Tool which is accessible through the Tools link within Account Management.

For more information, please call us at 919-719-7200.

 

 

 

 

Important Risks to Consider When Borrowing Stock to Support your Short Sale:

  • Short Sale Buy Ins / Force-Close Short Position may occur with little to no notice.
  • Special charges associated with hard-to-borrow securities can eat into or exceed your profits.
  • You do not get to keep the dividends on the stock that you borrow. 

 

Why would my short sale be bought in with little or no notice?

It is important that you are aware of the risks of borrowing stock to support your short sales. One of the major risks is that of being bought in with little or no notice. Even though a reasonable determination that the shares can be borrowed will be made prior to affecting your sale transaction, there is no assurance that those shares will actually be available at the time of settlement or any day thereafter.

The supply and demand of borrowable inventory for any given security are dynamic by nature and regulations require brokers to force-close any short position having a delivery obligation subject to fail with the clearinghouse on any given day. Please note that we will make every effort to provide you with advance notice if this appears to be the case in order to provide you with the opportunity to buy in your own position, however, this is done on a best-efforts basis.

 

Other Risks to consider with Short Selling

Other risks to keep in mind are the special charges which tend to be associated with hard-to-borrow securities that, in aggregate may exceed any rebate or interest paid on the short stock proceeds, as well as your obligation to pay to the lender any dividends which are paid throughout the duration of the loan period.

 

 

 

Learn more about Short Sales

 

 

 

 

 

 

 

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