If you sell a stock short, and then it drops to zero cuz the company busted... is that the ideal short?

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If you sell a stock short, and then it drops to zero cuz the company busted... is that the ideal short?

2006-07-30 13:02:55 · 4 answers · asked by holymoly! 2 in Business & Finance ➔ Investing

4 answers

that would be ideal. then you could buy-back the stock for US$0 per share and make a substantial spread on your short investment.

2006-07-30 13:35:38 · answer #1 · answered by J 4 · 0⤊ 0⤋

Yes, however they probably will not go to zero. It'll stay a t a few cents unless the company controls no assets at all.

2006-07-30 20:15:00 · answer #2 · answered by Mike K 3 · 0⤊ 0⤋

If they go into bankruptcy proceedings, you may have a problem.

I think the idea is to cover your short a little before that. Why be greedy for a few cents?

2006-07-30 20:05:34 · answer #3 · answered by dredude52 6 · 0⤊ 0⤋

yes

2006-07-31 01:17:15 · answer #4 · answered by Anonymous · 0⤊ 0⤋