Short Selling at Scottrade

Let's take a look at how the short sale process works at Scottrade.

  1. A client with a margin account at Scottrade places a short sale order.
  2. Scottrade searches its own inventory and the inventory of its lenders in attempt to locate the shares you want to borrow.
  3. If the stock is located, the short sale order is accepted, the order is filled, and the client sells the shares in the market.

The short sale transaction is executed, and the shares are settled in T+2. If the short shares pay dividends, they are to be paid to the long holder.

Short Sale Requirements

To sell a stock short, you must have a margin account with Scottrade. Margin accounts require you to meet certain account minimums and maintain a minimum level of equity.

For your order to be filled, the security must be priced at or above $5, and it must be marginable. Additionally, we must have the shares available for you to sell.