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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Slow&steady who wrote (25579)	3/30/1999 6:16:00 PM
From: Smilodon	Respond to of 122087

Yes, the brokers can force you to cover at any time. This is called a "buy-in." Essentially you are borrowing shares from someone who has the shares in a margin account. The margin agreement allows the broker to loan the shares out. If that account then sells the stock themselves, you must deliver them. Normally the broker will try to borrow from another account to keep your short position in place, but if they can't find any, you must buy in the open market. Shares held in a cash account (not margin) or in certificate form cannot be loaned out. The true definition of a short squeeze is when shareholders take their shares in certifate form or move them to cash accounts, and thus force the shorts to cover, since they can't find any borrows to maintain their position. This is very, very nasty, but is also very rare.