What happens if I am short stock and there is a spin off?

MANAGE STOCK DIVIDEND ELECTION

Dividend election is an option where you can elect how you wish to receive your dividends for stocks and mutual funds. You can turn automatic dividend election on or off at the account level only; that is, you cannot choose which dividends to reinvest. Dividend election is disabled by default for stocks; however it is automatically enabled for mutual funds…

Your account may be charged for a dividend if you have an open short position on the record date. The ex-date is the first day the security will trade without entitlement to the distribution…

The most common instance of this will occur when an account holder held a short option position prior to the ex-dividend date. In the event a long options holder exercises the position prior to ex-dividend date, the short holder may be assigned. Such action may lead to an account holding a short stock position over the ex-dividend date and will therefore be charged the dividend…

A spin-off is a corporate action that separates a firm into two or more independent entities. The new shares are typically distributed on a pro rata basis to keep proportional ownership of the parent company and the newly spun-off entity…