Skip to main content
This Board Has Moved

This board has been migrated to our new platform! Check out the new home page at or click below to go directly to the new Board on the new site.

Go to the New Site
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
The rules of the broker you borrowed the shares from in order to short them by immediately selling, will determine when you have to cover your position by buying them back and returning them to the broker. It's sort of like when you decide to borrow money from the Mafia. You're letting them decide how long they're willing to wait before they come with the baseball bats.

However, the SEC has special regulations requiring brokers to issue a margin call when an investor's losses reach a certain amount. This is to protect you from yourself, because there is the potential of unlimited losses. The same cannot be said of gains, which can only reach a maximum of 100% if the stock goes to zero, which is why shorting is generally considered a game only for the rich, the brave or the stupid.

If you are thinking about playing, I hope you are the former. (And that you stay that way by not gambling when the odds are so much against winning.)


Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.