An earlier question about short sells reminded me there was a question I’d wanted to ask someone knowledgeable.
And where am I going to find a more knowledgeable bunch of people with nothing better to do than answer my question!!?
What if I had sold short a pile of a major stock that suddenly gets delisted? aka, Enron?
One week, it’s a major, respected stock that for whatever reason I think is going to take a dip in the next few days. I “sell” 200 shares at 90, put 18000 in the bank to sit on a week anticipating to buy them next week at 80 leaving me with 2000 minus fees. Not too bad for a week of day trading.
Then the scandal breaks midweek and the price plummets so I just sit on it watching the price go down and down finally hitting 30 cents before being delisted.
Whoops! Can’t buy a delisted stock!
Did I just make 18 grand?