I read something an hour or two ago. It seems when FDIC closed this bank (abruptly), the stock stopped trading. People who shorted the bank may not be able to unwind their positions. Also, if they did this on margin, it could be even worse!! Is this true...Is this happening?? I do no short stocks...But this one is interesting. Any scuttlebutt on what is happening...
This is how it works with IBKR. The moment you short a company your available cash just increased by that amount. So I you had $0 available cash and you shorted 50K on margin , you will have 50K cash in your account. I think your broker will close that position for you automatically once the ticker is removed.
Yet another reminder why I can never trade equities again. A bunch of poor saps own a bank stock on Monday trading around $300 a share and by the end of the week it's all gone. This wasn't some offshore crypto scheme, it was a 40 year old FDIC insured bank that was the 16th largest in the country. The last stock I ever traded like this was an even more boring grocery store that got halted overnight and opened at a small fraction of the prior close days later. Nothing is safe.
This is one of the major reasons why I stopped trading stocks 2 decades ago. I don't want to be troubled by those cunning manipulative CEOs. Now I day trade major futures only. I want to be able to have a good rest every single day.
I seem to remember that the price of oil futures was negative a couple years ago and that many holders were unable to unwind their positions. This sort of disaster can happen with any type of investment.
It was actually good news for the day traders trading the most active futures contracts. Some foolish newbies traded the futures contract that was going to be expired. Its volume was very low.
So the broker is on the hot seat, rather than the trader in margin accounts. The broker is waiting to unwind the trade and the trader can pay off their margin account yesterday (Friday)...Is that correct?? I just can't see a broker getting exposed like that... Could it take weeks or months for the trade to unwind...While the margin money is still churning against the trader??