What is a “Buy-In” and when does it occur?

A Buy-in refers to a forced close out of a short position by your brokerage. Customers holding short stock positions are at risk of having these positions bought-in and closed often with little or no advance notice. This is a risk which is inherent to short selling and generally outside the control of the customer.

There 2 scenarios where Buy-ins could occur:

  1. By our Corresponding Broker: This can happen without any notice to the brokerage firm. Once notified by our Corresponding Broker, SureTrader will then notify the customer as soon as possible.
  2. By the Brokerage Firm: SureTrader is licensed for principal trading and can accept or deliver trades from its own inventory.   Instances where the firm does not have inventory to deliver or cannot locate any in the market, a forced buy-in of short shares may occur.   If enacted, this type of buy-in would only occur on stocks that are not on the day’s short list.  It is SureTrader’s buy-in policy execute shares at the NBBO (National Best Bid or Offer).  Once executed, SureTrader will then notify the customer as soon as possible.

Buy-ins are not reported on a real-time basis, but we make a best effort to notify clients on a timely manor.