Before the market opened on Friday, I received a call from my broker informing me that shares of CYN were no longer available to borrow, and my short position was to be purchased to cover upon the market open. Although I was a little surprised, this occasionally happens to short positions. The last time this happened to me was in late December, 2008, which altered my capital gains tax situation; short seller beware.
My 40 shares were bought to cover at $37.45.
Since my initial short position on August 6th, CYN has fallen 8.2%, whereas the market has risen 8.8%. My original time horizon was 6-9 months, so most of my arguments have yet to transpire. I still would avoid banks in problem areas, such as California. If the opportunity to short CYN reappears, or if I find another bank with similar circumstances, I may recycle this trade.
Keeping score:
| 3-Aug | CYN | short | 40 | 40.66 | $ 1,619.35 | Cali bank ripe to pull back | |
| 18-Nov | CYN | dividend | 40 | 0.1 | $ (4.00) | ||
| 20-Nov | CYN | bought to cover | 40 | 37.45 | $ (1,505.00) | broker ran out of borrowed shares; forced sale | |
| $ 110.35 | 6.8% |
News item:
My last major article, Surviving the Recession of 2010, was published Wednesday on Seeking Alpha. Here is the link:
http://seekingalpha.com/article/173763-surviving-the-recession-of-2010
