Brokerage firms, including Fidelity, often have terms and conditions outlined in their customer agreements that might allow them to sell your stock shares without explicit permission under specific circumstances. This is primarily seen in situations involving margin accounts.
If you are using a margin account, your shares could be considered collateral for the margin loan you take from the brokerage. If the value of your holdings declines significantly, the firm may issue a margin call, requiring you to deposit more funds. Should you fail to meet this call, the brokerage typically has the right to sell some or all of your shares to cover the shortfall, possibly without any notice to you.
Additionally, certain other scenarios exist where a brokerage might sell your shares without explicit consent, such as settling outstanding debts or fees you owe the firm.
It’s crucial to thoroughly read and understand your account agreement with any brokerage to comprehend under what conditions this kind of action may occur. If in doubt, reach out directly to your brokerage’s customer service for a detailed explanation regarding their policies and your specific situation.
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