From my understanding, if a stock reaches 0 then the position remains open as you can't close the position.
This happened to a friend of mine a few years ago while using Spreadbetting to short stocks. In his case the SBetting firm would not close his position automatically. Instead the trade was "frozen". From memory the dispute between himself and the SB firm took a while to resolve. I think in the end, given the amount of money involved, the firm decided on a "fair value" so as to allow the position to be closed.
Not sure if this helps though but hopefully other posters can offer some better guidance on this topic........
Definately a problem with CFDs/spreadbetting. However to short common stock you must have a margin account, and as your margin position is marked to market every day, the profit is available for trading even if the share disappears.
I don't know how the bookkeeping is tidied up, because it hasn't happened to me, but your funds are certainly not frozen.
Definately a problem with CFDs/spreadbetting. However to short common stock you must have a margin account, and as your margin position is marked to market every day, the profit is available for trading even if the share disappears.
I don't know how the bookkeeping is tidied up, because it hasn't happened to me, but your funds are certainly not frozen.
To clarify, when I referred to the trade being "frozen", I was referring to that current trade - not his entire funds. What I meant by frozen was that he was unable to close the position and thus unable to "realise" the profit. Consequently, he was unable to withdraw that portion of money from the account until the matter was settled.
This did happen a number of years ago so maybe Sbetting companies now have some actual guidelines should this happen these days.....
To clarify, when I referred to the trade being "frozen", I was referring to that current trade - not his entire funds. What I meant by frozen was that he was unable to close the position and thus unable to "realise" the profit. Consequently, he was unable to withdraw that portion of money from the account until the matter was settled.
This did happen a number of years ago so maybe Sbetting companies now have some actual guidelines should this happen these days.....
This happened here when ION went down the gurgler a couple years ago... but 100% of the funds (of the underlying value of that particular trade) were frozen.
Perhaps someone who was in the trade can enlighten.
I was looking into short selling and signed up to IB as CommSec does not support it. Some of the stocks I wanted to short weren't available on the IB "shortable stocks" list:
I was looking into short selling and signed up to IB as CommSec does not support it. Some of the stocks I wanted to short weren't available on the IB "shortable stocks" list: