What?!?! Ameritrade won't let you sell your units of LINE?!?! Have they not yet fully settled into your account?!? I held my units with Fidelity and bounced in and out this past year with the ups and downs and never had any trouble at all selling and buying units at my leisure. I've not heard of anyone else having trouble selling either. Try again or call and talk to a rep! Unless you have a history of trade issues of kiting money and/or buying more shares than you have cash available to purchase, or some other restriction on your specific account, then you shouldn't have trouble selling LINE and buying LNCO. I know there were a few times this past year I did a similar thing in the same day.
No - you misunderstood. This would be a new trade. I do not own LINE, I want to short
a new position of 5000 shares and immediately buy 5000 LNCO. They have no LINE for me to borrow. Therefore no arbitrage available to me.