bz1516 Posted May 20, 2014 Share Posted May 20, 2014 I have a couple of successful shorts, one of which is getting close to losing most of its remaining value. My question concerns what happens when it gets delisted and goes into the black hole of the pink sheets? I’ve been told there are several risks. First if it goes into the pink sheets and trades as a penny stock it will still carry a minimum margin requirement of $2.50 per share. So I would have to pay any borrow fee on the market value and margin interest as if it were $2.50 per share. This would go on as long as and until DTC removes it entirely. It may also not be able to be traded with no way to end the costs? I’ve also been told this situation could last for years if the stock goes into litigation and DTC still has not removed it. On the positive side I have also been told that if I don’t cover for a realized gain there would be no tax liability? Sounds too good to be true, but if true holding until DTC removes the stock from their system may make sense? Any help with these issues would be greatly appreciated Link to comment Share on other sites More sharing options...
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