Proof that broker can force short sellers to close position
One of the least talked about risk when it comes to short selling is that the broker can force you to close your position anytime they want. That could trigger a short squeeze and cause you to lose a lot of money.
This could happen when there is an AGM and people need to vote thus they need to have their shares back.
Recently IBKR issued a warning to $GameStop(GME.US$ short seller that they may close his position by force. If there are a lot of short sellers and everyone are forced to close, we will see a short squeeze.
This can happen to all shares and to brokers. So just be aware of it and trade safely![]()
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This could happen when there is an AGM and people need to vote thus they need to have their shares back.
Recently IBKR issued a warning to $GameStop(GME.US$ short seller that they may close his position by force. If there are a lot of short sellers and everyone are forced to close, we will see a short squeeze.
This can happen to all shares and to brokers. So just be aware of it and trade safely
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MonkeyGee : short sellers are going to hurt today
JT Revolution MonkeyGee: Well done!
doctorpot1OP MonkeyGee: yea $DiDi Global (Delisted) (DIDI.US)$ pass CCP already. now up 50% pre market. I guess a lot of short sellers cried
Casual Trader doctorpot1OP: Hope squeeze to $5!!!
doctorpot1OP Casual Trader: Hope so
if the app pass means the listing in HK highly likely will go through. I'm waiting for the shares to convert to HK shares already and hold it for 10 years hehehe 
MonkeyGee : Hi Doc, I have to pick you brain again. Etrade is useless. Lets assume DIDI ends up in OTC market after delisting (which I believe where all delisted stocks go to retire). Since Etrade don't support HK market. What is the most likely how DIDI will be handle by Etrade? many thanks in advance.
doctorpot1OP MonkeyGee: wa this is very dependent on the broker. I know moo moo supports OTC cause I asked their customer support. and they also support HK and SG market so I know if they convert, I still can trade.
but if the broker don't support OTC or other market hor, they might force you to close it. Best to check with their support to see how they will handle it.
MonkeyGee doctorpot1OP: ETrade support couldn't tell me xhit. I assume they support OTC because I can trade Luckin Coffee. My plan is to move it over to moomoo eventually. But don't want to start the move and a decision comes out and thing changes. To convert the adr to HK shares is very expensive in moomoo (more than $700). So my plan is wait for Didi to hit OTC, sell, transfer cash into moomoo and repurchase the OTC adr. wait for ADR to close and hope for automatic conversion to hk shares. what do you think?
doctorpot1OP MonkeyGee: I see. hmmm I suggest you try again cause sometimes is just that one CS that don't know xhit. hahahaha. you need to try your luck to keep trying until you found a CS that knows their stuff.
I can't advise cause I'm not a financial consultant, so none of what i say is financial advise ah.
I can tell you what I am thinking though. Usually when corporate action like this happen, the swap should be free, they will work out a deal with selected brokers to do conversion for free within a specified period. The company then pays for the fees. I'm hoping this will be the case but no one will know until the black and white comes out hahahaha. I mean even now, we still don't know for sure if the CCP already give them green light. The news reports is what they heard only, not the real deal.
If they don't convert for free I might just exit, then buy the HK share when it list (if the price is right). but the risk is the ADR price is bad and exit at a loss.
So trade safe ah, this is risky stock.
MonkeyGee doctorpot1OP: Thank you for your feedback. I telling you 99% of the CS are clueless or pretend to be clueless. your words are always so wise. so let's say we get to the free conversion how will Etrade do it if they don't support foreign shares? do you convert it into moomoo?
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