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

When a stock is halted, it means trading is suspended by the regulatory bodies overseeing the exchanges and marketplaces. This may occur for a variety of reasons including, pending news, regulatory investigation, corporate restructure, or activation of the Limit Up Limit Down rule.

If a stock is halted only for a brief period during the day, your open short position can be covered when trading resumes.

However, if a stock is halted for an extended period of time and you cannot cover the open short position before the close of after-hours trading at 8 PM ET, you will be responsible to pay any overnight borrow costs, margin costs and any other fees incurred daily until the stock begins trading and the position can be covered or until DTC delists the security.

TradeZero will need to have sufficient equity in the account to cover these charges.

For more information on trading halts see: https://www.finra.org/investors/investing/investment-products/stocks/trading-halts-delays-suspensions