LogFAQs > #965834931

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TopicStock Topic 37
Lopen
06/15/22 1:41:35 PM
#102:


Like think what happens when you open a short position

You receive the value of the stock in cash (or + margin if you want to look it that way) as though you'd sold the stock
You owe the lender the stock now.

So now you're saying you can buy the stock back without paying cash (or -margin)? Think about the implications of that.

Like if I sell 10 shares of AMC short, and then use the proceeds to gain 1 share of Apple, how then do I cover the AMC shares? Logically by selling the apple if neither's price has moved, there wouldn't be a problem. But you're saying I can just do it for free and now I just have a share of apple and the same amount of margin use I had before I shorted AMC? Obviously not.

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