What happens if I sell short a security and the stock is halted before I can cover my position?

A trading halt means that trading in the stock is temporarily suspended by the exchanges or regulators. This can happen for reasons such as pending news, regulatory investigations, corporate actions, or activation of the Limit Up–Limit Down rule.

If the halt is brief, you will be able to cover your open short position once trading resumes. However, if the halt lasts beyond after-hours trading and you cannot cover your position by 20:00 ET, you will remain responsible for overnight borrow costs, margin costs, and any other daily fees until the stock resumes trading or the Depository Trust Company (DTC) delists the security. You must also maintain sufficient equity in your TradeZero account to cover these charges.

During a halt, the following may occur:
- You may be required to deposit additional funds.
- TradeZero Europe’s Auto Risk Monitoring may send orders to cover positions to restore sufficient equity.
- Withdrawals may be restricted.
- Your account may be set to Liquidate Only (LO), preventing new opening trades.

For more information,please refer to: https://www.finra.org/investors/investing/investment-products/stocks/trading-halts-delays-suspensions