What happens when a company stops trading? (pink sheets)
"What will happen if the stock price just continues to decline?  Nothing. What would happen if folks just stop trading it? Nothing. What if the company goes private? Then they will have to buy you out based on some agreed upon price, as voted by the board and (potentially) approved by the shareholders. Depending on the corporation charter, the board may not be required to seek the shareholders' approval, but if the price the board agreed upon is unreasonable you can sue and prevent the transaction. How do they decide the fair value of the outstanding stocks? Through a process called ""valuation"", there are accounting firms which specialize in this area of public accounting."
"Traders = every market participant. Not some shadow figure that excludes you just because you passively drop cash into a 401k Vanguard fund every paycheck. So yes, if everyone stopped trading then the price won't move. Trades are 100% responsible for the prices you see on charts and tickers. A stock won't be worth ""$100"" if nobody ever traded $100 for it. It only has that price now or in the past because somebody placed an order for it at $100 and somebody else filled that order at $100" Nothing. Stockbrokers set up nominee accounts, in which they hold shares on behalf of individual investors. Investors are still the legal owners of the shares but their names do not appear on the company’s share register. Nominee accounts are ring-fenced from brokers’ other activities so they are financially secure. @MichaelBorgwardt gave an excellent answer. Let me add a little analogy here that might help. Suppose you bought a car from Joe's Auto Sales. You pay your money, do all the paperwork, and drive your car home. The next day Joe's goes bankrupt. What affect does that have on your ownership rights to your car? The answer is, Absolutely none. Same thing with stocks and a stock exchange. A stock exchange is basically just a store where you can buy stock. Once you buy it, it's yours. That said, there could potentially be a problem with record keeping. If you bought a car from Joe's Auto Sales, and Joe went out of business before sending the registration paperwork to the state, you might find that the state has no record that you legally own the car and you could have difficulty proving it. Likewise if a stock exchange went out of business without getting all their records properly updated, their might be an issue. Actually I think the bigger concern here for most folks would be their broker and not the stock exchange, as your broker is the one who keeps the records of what stocks you own long term. In practice, though, most companies are responsible enough to clean up their paperwork properly when they go out of business, and if they don't, a successor company or government regulators or someone will try to clean it all up. There's two possibilities. One is that the broker declared your account abandoned and turned over your account to the state. If that happened, it should turn up here: http://missingmoney.com The second is that the broker is still holding your stock. I'd start by contacting the company's transfer agent. Yes, any company can go under. SIPC offers a level of protection. They don't guarantee against stocks dropping, but will replace stocks that you owned, but the broker stole from you. (overgeneralization). There's a $500K limit, with $250K max in cash. Depends on the structure of the company and what shares are outstanding.  If the pink sheet stock has no voting power then buying all that stock doesn't get you any control at all.  On the other hand, if the outstanding shares only represent 20% of the company's overall shares, then buying all the shares isn't likely enough to have a controlling interest. Thus, you'll have to dig into the details.  If you want an example of where I'd have my doubts, look at Nestle's stock which has the ticker of NSRGY.  There can be companies that are structured with stock on multiple exchanges that can also be a challenge at times.  There is also something to be said if you own enough stock in a company that this has to be disclosed to the SEC when you buy more. Investment banks will put out various reports and collect revenues from that along with their banking activity.  I don't read them or care to read them myself.  If banks can make money from something, they will likely do it, especially if it is legal. To take the Tesla stock question for a moment: Aren't you ruling out that yesterday was the day that Tesla was included in the Nasdaq 100 and thus there may be some people today exiting because they tried to cash in on the index funds having to buy the stock and bid it up in a sense?  Or as @littleadv points out there could be those tracking the stocks not in the index that would have been forced to sell for another idea here. The Goldman note is a possible explanation but there could well be more factors in play here such as automated trading systems that seek to take advantage of what could be perceived as arbitrage opportunities. There can be quick judgments made on things which may or may not be true in the end.  After all, who knows exactly what is causing the sell-off.  Is it a bunch of stop orders being triggered?  Is it people actually putting in sell order manually?  Is it something else?  There are lots of questions here where I'm not sure how well one can assign responsibility here. Stocks go down and go back up, that's their nature... Why would you sell on a low point? Stocks are a long term investment. If the company is still healthy, it's very likely you'll be able to sell them with a profit if you wait long enough. Just because it gets delisted from one of the big boards doesn't mean it can't trade over the counter.  For example GM went OTC under the ticker MTLQQ for a while.  That being said, just because the stock is trading over the counter doesn't mean it has any real long term value. If you are in a position to have information that will impact the shares of a stock or index fund and you use that information for either personal gain or to mitigate the losses that you would have felt then it is insider trading.  Even if in the end your quiet period passes with little or no movement of the stocks in question.  It is the attempt to benefit from or the appearance of the attempt to benefit from inside information that creates the crime.  This is the reason for the quiet periods to attempt to shield the majority of the companies employees from the appearance of impropriety, as well as any actual improprieties. With an index you are running a double edged sword because anything that is likely to cause APPLE to drop 10% is likely to give a bump to Motorola, Google, and its competitors.  So you could end up in jail for Insider trading and lose your shirt on a poor decision to short a Tech  ETF on knowledge that will cause Apple to take a hit.  It is certainly going to be harder to find the trade but the SEC is good at looking around for activity that is inconsistent with normal trading patterns of individuals in a position to have knowledge with the type of market impact you are talking about. "Your broker likely didn't close your position out because it is a covered position. Why interfere with a trade that has no risk to it, from their perspective? There's no risk for the broker since your account holds the shares available for delivery (definition of covered), for if and when the options you wrote (sold) are exercised. And buyers of those options will eventually exercise the options (by expiration) if they remain in-the-money. There's only a chance that an option buyer exercises prematurely, and usually they don't because there's often time value left in the option. That the option buyer has an (ahem) ""option"" to exercise is a very key point.  You wrote: ""I fully expected my position to be automatically liquidated by whoever bought my call"". That's a false assumption about the way options actually work.  I suggest some study of the option exercise FAQs here: Perhaps if your position were uncovered – i.e. you wrote the call without owning the stock (don't try this at home, kids!) – and you also had insufficient margin to cover such a short position, then the broker might have justifiably liquidated your position. Whereas, in a covered call situation, there's really no reason for them to want to interfere – and I would consider that interference, as opposed to helpful.  The situation you've described is neither risky for them, nor out of the ordinary.  It is (and should be) completely up to you to decide how to close out the position. Anyway, your choices generally are:" Randomly selected stocks would probably become worthless at a similar rate of all businesses going out of business do.  I'm not sure why you'd randomly select a stock though.  Stocks in the S&P500 (or other similar index), or large-cap stocks probably become worthless at a much lower rate. "Many investors don't invest for the short term and so a stock ""nose-diving"" in the short run will not affect their long term strategy so they will simply hold on to it until it recovers. Additionally funds that track an index have to hold on to the constituents of that index no matter what happens to its value over the period (within trading limits). Both of these kinds of investors will be able to lend stock in a company out and not trigger a forced buy-in on a short term change. If the underlying long-term health of the company changes or it is removed from indices it is likely that this will change, however. Employee stock plans and other investors who are linked directly to the company or who have a vested interest in the company other than in a financial way will also be unwilling (or unable) to sell on a down turn in the company. They will similarly be able to lend their stock in the short term." "Going private does not mean that the company buys its own shares, only that the freely traded shares are bought up by a private entity (this can be management =&gt; ""management buy-out"" or it can be a private investor). The stock is then not traded publicly and the company gets rid of a whole slew of compliance obligations.   In your stated example the company would essentially convert all its stock to treasury stock, which does not pay dividends and has no voting rights. From what I gather from some googling this would actually imply that the company would liquidate itself since it now has no capital anymore. Not sure on this though, an accountant might be able to help here..." My understanding was that if a company buys back shares then those shares are 'extinguished' I.e. the rest of the shareholders now own a greater portion of the company. However, if there is only one share left, then the company could not buy it because doing so would extinguish it leaving the company without an owner. That result would run contrary to the requirements for an incorporated company in countries like NZ and Australia.