RE:RE:RE:RE:RE:Short SqueezeIt's a little bit more complicated than that.
If I short a stock. I initially don't need the stock to sell it. However at the time of settlement, my broker needs to find the stocks to deliver to the buying broker. If they can't find it, then it's a failure to deliver and the short seller gets a forced buy-in called on them. When you own stocks at a broker, there is a form, that allows you can opt-in or out of that states your shares are available for the broker to lend out.
Some brokers will pay you for the privilege, most discount brokers just include it in the terms of the deal. You get cheaper commission, they lend out your stocks at the borrow rate.
I have received one before, and it's heart breaking. 15 minutes before the close for some brokers or at the open; they will send you an email saying they are closing your short position. Of course, this only happens when the stock is on a tear and generally illiquid. When the stock is on the move, brokers will recall the borrowed shares to settle trades for their client or in preparation for it. And no, it's not voluntary. Even if you have the cash to hold the position it will get covered because your broker can't find the paper to keep your short position open.
The Difference Between a Buy-In and a Forced Buy-In
The difference between a traditional and forced buy-in is that in a forced buy-in, shares are repurchased to cover an open short position. A forced buy-in occurs in a short seller’s account when the original lender of the shares recalls them. This can also occur when the broker is no longer able to borrow shares for the shorted position. In some cases, an account holder might not be notified before a forced buy-in.