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What happens with short sales when a stock is delisted.
What happens with short sales when a stock is delisted? What about puts? I would think that the underlying stock trading to 0 would give maximum value for the short position, but how is the contract actually fulfilled? How do you return shares that I borrowed, if I can't purchase them on the open market (delisting)?
Asked by PaddyMullen in
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one year ago
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293 points
Intern answered one year ago …
Essentially the broker you borrowed the stock from will mark the position down to zero. The short sale is simply you borrowing stock from your broker, so the arrangement is with them and not the exchange the stock was delisted from.
Check out this article:
http://www.davemanuel.com/2007/08/19/what-happens-if-a-stock-that-i-am-sho rt-goes-bankrupt/
