You agree to advise us prior to entering a sell order if it is a “Short Sale” (the sale of a security you do not own). You agree that all Short Sale transactions will be executed in a Margin Account. You understand that to facilitate a Short Sale, we must borrow the securities you sell short. We may charge you a fee in connection with your Short Sale as set forth in the then-current Commissions and Fees schedule. Short Sales can be subject to a buy-in from settlement date and thereafter. Scottrade does not guarantee a minimum time to short a position. If Scottrade is unable to borrow or re-borrow a security you have sold short, or for any other reason we deem prudent, we may cover your position (by buying the stock at the current market price) at our discretion and without notice to you; you agree to be liable to Scottrade for any resulting debit balance. Margin Accounts are marked to the market daily and any increase in value of a short position will result in that unrealized loss being added to your debit balance, with interest charged as described above. Similarly, a drop in value will decrease your debit balance.
If the lender should call in your borrowed securities for any reason, such as a tender offer, and you cannot cover in time to make delivery, we may hold you responsible for any resulting loss. You agree that if market conditions change, we are unable to borrow the securities, the lender recalls the securities, or the provisions covered by the closeout requirements of SEC Regulation SHO become applicable, we may attempt to re-borrow the securities, but you understand that we may need to cover the short position in your Margin Account on the open market at the then-current market price and market conditions. You understand that you will be responsible for any resulting loss, short rebate expense or associated costs incurred by us in connection with short transactions. The initial margin requirement is 50 percent of the Short Sale amount and the minimum maintenance level is 135 percent of the market value of the short position on securities priced at or above $14.30 per share. On securities priced between $5 and $14.30, the maintenance requirement is $5 per share plus the cost to buy back. Securities under $5 may not be sold short. Short Sale proceeds help secure our loan to you and may not be withdrawn. You are liable for any dividends paid on securities you have sold short.