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by mklauber1
1966 days ago
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They get interest from Person B, and when the short contract is up, they can force Person B (or more accurately their broker who passes the price on) to buy a replacement stock, regardless of the price. Alternatively, they can attempt to open another short contract, paying more interest to have continue to borrow the stock. Sooner or later, however, person B is legally and contractually required to to return an identical share to person A. |
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Options are contracts which expire. A short position is not that, it doesn't have any expiration date.
It can be untenable to maintain that short position forever due to costs, but that's a different discussion.