Shareholder FAQ
To borrow a stock, you need someone to lend it. Brokerage firms fill this role. With limited exceptions, short sellers are borrowing from brokerage firms (i.e. your brokerage firm may be lending out your securities to another party who is actively hoping to drive down the price of the stock).
While your brokerage firm can’t lend out your stocks without your permission, you likely signed a customer agreement that explicitly allows your broker to do just that. This clause is often buried in your customer agreement and few people pay any attention to it.
- Switch from a margin account to a cash account. If you aren’t trading options or buying securities with borrowed money, there is no reason to have a margin account
- Confirm with your broker that you are not participating in their Fully Paid Lending Program where some brokers will include margin accounts.
- If you’re still using Robinhood, use Robinhood Cash rather than Robinhood Instant or Robinhood Gold.
Unfortunately, many brokerages do not accept digital signatures for security purposes so we recommend you complete the form, print, manually sign and then mail to ensure your request is processed in a timely manner.
