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Short Positions


Guest Graham S

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Guest Graham S

Hi,

I want to know what happens to a short position if the company you are shorting goes bankrupt or de-lists?. Is the trade deemed to close at zero for maximum profit or the last trading price?

Thanks

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On 15/05/2020 at 10:15, Guest Graham S said:

Hi,

I want to know what happens to a short position if the company you are shorting goes bankrupt or de-lists?. Is the trade deemed to close at zero for maximum profit or the last trading price?

Thanks

Thanks for your post. 

If a company were to go bankrupt, they have to announce what they are or are not giving to share holders. If this is the case then the company will pay out to share holders (if they are giving a payout) and the stock will settle. If they're not paying out to share holders it will settle at 0. 

Please note all situations are different and our corporate actions team will reach out to clients who hold positions in stocks that go bankrupt/ delist. 

I hope this helps. 

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