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? asked in Business & FinanceInvesting · 2 weeks ago

What are short stock sales?

A stock now said there are no available shares to short. Does this mean eventually there will be a short squeeze in which a lot of covering will take place and drive the price higher?

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  • ?
    Lv 7
    2 weeks ago

    Short stock sales are sales of a stock you don't own, by borrowing it from someone who does own it. You will have to return that stock to your lender eventually, so you will have to buy it at some time.

    If your broker is the one who told you there are no shares available, that means the broker does not have any available to lend to you.

    This could be caused by too much short selling, which could lead to a squeeze if all sellers have to buy back the stock at around the same time. Or there could be any other reason why your broker doesn't have any shares. 

  • 2 weeks ago

    <<<What are short stock sales?>>>

    Sales made by people who do not own the stock.

    <<<A stock now said there are no available shares to short.>>>A stock does not say anything. Your brokerage said they could not get any shares to allow you to sell short. Your brokerage has to deliver the shares you shorted to the buyer. In order to get the shares to deliver the brokerage has to be able to borrow the shares. <<<Does this mean eventually there will be a short squeeze in which a lot of covering will take place and drive the price higher?>>>

    It means a short squeeze is more likely, but not that a short squeeze is inevitable. 

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