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I must thank everyone here for helping a beginner like me to understand what to date I thouhgt is the toughest thing on earth.
I have a question here, when I return the shares to the broker, he takes back the Shares or the equivalent money value? I think it is the shares because I am a trader. |
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A short sale must be covered at some point. You are basically buying back the same amount of shares and returning it to your broker. If the price drops on the stock, you are able to buy it back at a cheaper price and profit from the difference.
In the futures market, you can hold on to a short as long as you like until you meet a margin call. In the stock market, brokers can not lend out stocks they do not have. So it is possible you might get a call to return the borrowed shares. Thus, you may need to cover your shorts.