Quote:

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The broker can not loan out shares that are in a sale condition.

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Sorry. The above is not true (at least not at Etrade).

I just called the Etrade trader's desk again this morning with this question (about conditional future orders). Here is a summary of their answers:

1) Future (conditional) sale orders have no bearing on whether shares can be loaned out for shorting or not, and they might just cancel your order if it runs too far into the future.

2) Shares in a cash account can never be loaned out for shorting

3) Shares in a margin can be loaned out for shorting, (especially if you have a margin loan).

Since this is the second time that Etrade has given me the same answers, I trust their response/information on this matter.