antelopedundee
Well-known member
How is it possible to sell shares that you don't own or haven't borrowed or can't borrow? If you can't deliver the certificate wouldn't be the sale be canceled?
NAKED SHORT SELLING
- Thread starter antelopedundee
- Start date
npaden
Well-known member
I think @JohnCushman has the naked short selling thing figured out. Maybe he will chime in.
huntandfly
Well-known member
Maybe in 1920 that’s how it worked, but now they have what is called “margin” where you can trade with money you don’t actually have if the brokerage deems that you are good for it.
Naked short selling is obviously very dangerous for individual investors and usually won’t be approved unless you have a larger account. Larger institutions have no issues using margin like that
Naked short selling is obviously very dangerous for individual investors and usually won’t be approved unless you have a larger account. Larger institutions have no issues using margin like that
SAJ-99
Well-known member
Option market makers don't have to do a locate on short sales. If they end up net delta negative, they hedge that options exposure and can easily be naked. The MM fixes this by jacking up the cost of the option (see implied vol). Regular investors can't be naked short. The broker is required to do a locate before the sale is executed.
I'm sure Cushman's explanation is far more entertaining.
I'm sure Cushman's explanation is far more entertaining.
JohnCushman
Well-known member
At first I thought this was about midget strippers.... Imagine my disappointment
Gellar
Well-known member
This wouldn’t be the first time a thread has been hijacked on hunttalk.
utah400elk
Well-known member
I thought you guys had talked to my wife…carry on.
