CFA Practice Question
Which of the following steps in the process of selling a stock short are FALSE?
A. The short seller gets the proceeds of the short sell.
B. The seller must inform their broker that the order is a short sale before completing the transaction.
C. The seller must borrow the securities from a broker before selling them and must return the securities at the request of the lender.
Explanation: Short sellers DO NOT get the proceeds of the short sell.
User Contributed Comments 4
| User | Comment |
|---|---|
| bidisha | I thought by proceeds they meant premium. |
| birdperson | what premium? |
| Noblebao | i think this explanation needs an elaboration |
| krispy4 | The proceeds are actually deposited in a margin account as collateral. |