dChan
Anonymous ID: c96388 May 15, 2019, 12:12 p.m. No.6506466   🗄️.is 🔗kun   >>6475 >>6750 >>6797

Overstock.com CEO sells shares-fought against Naked Shorting.

 

Please visit this site:

Deep Capture

https://www.deepcapture.com/tag/patrick-byrne/

it is a great site if you want to learn about this practice. It was never dealt with by the SEC-surprise!

 

What is Naked Shorting

 

Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. So naked shorting refers to short pressure on a stock that may be larger than the tradable shares in the market. Despite being made illegal after the 2008-09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems.

 

Understanding Naked Shorting

 

Naked shorting takes place when investors sell shorts associated with shares that they do not possess and have not confirmed their ability to possess. If the trade associated with the short needs to take place in order to fulfill the obligations of the position, then the trade may fail to complete within the required clearing time because the seller does not actually have access to the shares. The technique has a very high risk level but has the potential to yield high rewards.

 

While no exact system of measurement exists, many systems point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting. Naked shorts are believed to represent a major portion of these failed trades.

 

Key Takeaways

 

Naked shorting was the focus of regulatory changes in 2008, in part as a reaction to the piling on of shorts on Lehman Brothers and Bear Stearns.

Naked shorting is often suspected in emerging sectors where the float is known to be small but the volatility and short interest is nonetheless quite high.

Although controversial, some believe naked shorting plays an important market role in price discovery.

ahhh no….it is and alway's has been a way for the system to beat chosen company's down that they target.

NFLX, in it's early day's, was a prime example-they were trying to extend blockbuster's life. Fun fact-did you know that NFLX was offered to blockbuster for $50m?-they passed on it.

 

https://www.investopedia.com/terms/n/nakedshorting.asp