GREY:PGDIF - Post by User
Comment by
mill44on May 24, 2018 5:35pm
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Post# 28077907
RE:Shorting PGD - Thought Experiement
RE:Shorting PGD - Thought ExperiementIt is only an issue if you hold your position through ex-dividend / rights day. That's the time ownership is established. Since there are two owners of the same stock, you will have to take care of the owner whose shares you borrowed. As long as you cover before or sell after, there is no problem. If you don't, you most likely would have to buy the rights on the open market and deliver them. But since most stocks drop with rights, you will probably still make money. Of course the broker can force you to cover any time, the risk of shorting. As for dividends, usually the stock drops on the ex-dividend day, so you might be ok even if you hold through.