Borrowed Stock

Borrowed Stock - Borrowed stock is stocks that are found in a short sale that a short seller obtains on loan from a broker, usually his or her own broker, and then has to sell in the open market. There is a fair risk to this type of activity, as this strategy may find that the price of the stocked borrowed from the broker could rise in the stock market. This could result in the short seller having to purchase the stock at a much higher price then he or she sold it for, which means taking a loss on the stock's trade.