My broker allow sell stocks that i dont have (is not a short sale) - can brokers create stocks ?

Discussion in 'Retail Brokers' started by thepalatinezoom4, Oct 16, 2020.

  1. Can brokers criate stocks that dont exist ?
     
  2. I have a cash account, so is not a short sale
     
  3. Overnight

    Overnight

    Wow. Just wow. If I remember the basics, selling a stock you do not have is called a short sale. But what do I know, I trade futures. So I could be wrong on that.
     
  4. Robert Morse

    Robert Morse Sponsor

    You can't short in a cash account and brokers can't create shares. If you had a margin account and sold short, they would borrow shares from another client or another broker to make delivery of the share you sold but did not own.
     
  5. Overnight

    Overnight

    Why can't you short a stock in a cash account? If you have $100,000 cash in an account, you could not short 100 shares of a stock at, I dunno, $50 bux?
     
  6. Robert Morse

    Robert Morse Sponsor

    SouthbeachCTA and Overnight like this.
  7. Is it called Naked Shorting?
     
  8. Yes. I have accounts with 5 more brokers and none of them allow it. I am very surprised

    I just send a order to test

    I don't know what would happen if I failed to get the shares before settlement date
     
    TrailerParkTed likes this.
  9. Yes, I can.

    I sent the order and it appeared at level 2

    Brokers can sell shares that they do not own, but they must deliver until the settlement date.

    I have accounts with 5 more brokers and none of them allow it. I am very surprised
     
  10. Robert Morse

    Robert Morse Sponsor

    I’m not sure how to reconcile your comment. You sent an order when the markets closed in one statement, And claim to see it in a level to display and another one said that none of them allow you to do it. If you’re using a US broker dealer, shorting is simply not allowed in a cash account, just that simple. I’m not sure what benefit you get from five cash accounts.
     
    #10     Oct 17, 2020