What is forced buy-in?

A forced buy-in occurs when a client has previously shorted a security and is required to cover their short position. This can happen when there is a shortage of available shares for borrowing or if the original lender of the shares recalls them. Forced buy-ins are more likely to occur in heavily shorted stocks or during periods of heightened market volatility. Clients who engage in short-selling should be aware of the risks associated with forced buy-ins. Please note that you might not receive prior notice before a forced buy-in is initiated.