If you on margin and borrowing money from the firm, they can loan your shares out to short period. Putting a limit sell order does not change the fact that those shares are still there and available. Some people say you can't short a penny stock, just because "their broker" won't let them. "IT's the LAW" LOL!!! Give me a break. Me thinks that Mr. Ima Broker is short, and doesn't want to be cut off, what he doesn't realize is that the 900 pound GORILLA is gonna pound him into sawdust...
Why is this even a debate. Putting a gtc sell order or whatever has absolutely no effect on restricting the shorts. It is like this, every fund that exists out there Fidelity, Vanguard, etc., ALLOWS their shares to be short. The funds nearly always own way more shares than individuals. You can put your 100, 10k, 100k shares at gtc sell but the funds might own 25 million shares. They sometimes encourage shorting when they do downgrades to create a new long position. When they get your weak hand, and shorted shares at a great average price, they upgrade, burning late shorts, and those who bailed on the pull back. The bottom line is, they are in control, and lead, you have to dance one step ahead is all. This GTC myth has been out there for decades, the bottom line it has no impact.
On a side note, there is and has been phantom shares for years. The simple proof of that is the Lehman data. When all was said and done, there were MILLIONS more shares shorted than existed. With no way to PROVE who shorted phantom shares all shorts got to keep their winnings. So if it makes you feel good to put a gtc order in, do so, but thinking it will force even one share to be covered is amusing.
If you even HAVE a margin account they can borrow your shares to short. You don't have to be ON margin at the time. Many margin accounts NEVER borrow (like me) but have margin to have the ability to short shares. And because my account IS a margin account the brokerage can loan out my shares.
You can't short shares if you don't have a margin account. Has nothing to do with whether you are using the margin or not.
NOT TRUE. I'm sorry but that's not true. I don't care if you have a margin account or not. If you buy shares and own them and have a sell order on them they can't be loaned out to short. It just can't happen.
That may be true with your brokerage firm, not all firms have the same agreement, again, pick up the phone and call your broker, or read your particular margin agreement. My firm only lends shares within it's client base, and only if you have a margin account AND are currently borrowing money
Now, you're talking about something else. Those shares DON'T belong to you if you are barrowing money to buy them. That's different. If you own 100 shares of stock "A", that's what I said in my post. If you own 100 shares of stock "A" and have a sell order on them they can't be shorted.