| Revision as of 06:22, 22 June 2005 edit24.187.228.138 (talk)No edit summary | Revision as of 22:08, 22 June 2005 edit undo67.121.189.182 (talk)No edit summaryNext edit → | ||
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| A naked short is one in which a stock broker does not find the stock shares | |||
| (The following is an excerpt from the first page of the book "Naked Short Selling: The Illegal Hacking of the U.S. Financial System" - By Alan Lomax.) | |||
| to borrow within 3 or 13 days. A retail investor is not allowed to | |||
| naked short, but a market maker is allowed to have a | |||
| naked short for "Bona-fide market making." | |||
| PRO naked short opinion: | |||
| The Naked Short Selling Problem in a Nutshell | |||
| In criminal penny stock fraud operations, retail investors are encouraged | |||
| to buy a stock pushing it's value far beyond its true value. | |||
| If naked shorting were allowed by SEC rules, other brokerages would | |||
| step in and naked short the penny stock bringing it back to true value. | |||
| In essence, SEC rules against naked shorting allows penny stock fraud operations to exist and make | |||
| large profits. By making naked shorts illegal, volume of trading is reduced resulting | |||
| in higher spreads and illiquidity. | |||
| ⚫ | Naked Short Selling is the illegal practice of short selling shares that may not even exist. Phantom stocks, ghost longs, and other forms of naked shorts flood the market with unaccounted-for shares, causing a devaluation of the legitimate share price of many companies’ shares. While it is likely that you may have heard the term “naked short selling” or been introduced to this problem, you may not fully understand the jeopardy to which this practice could subject your company. Once you are made aware of the potentially devastating effects of naked short selling and the costs it imposes upon the markets, small businesses, and investors, you will understand why it is an urgent issue that simply cannot be glossed over or ignored. Indeed, there is no more pressing issue than dealing with the failure of our securities system to provide authentic and accountable trading for investors. This scheme deprives companies of their ability to finance themselves and grow, it robs investors of millions of dollars in potential profits, and it costs the U.S. economy untold billions of dollars. | ||
| Con naked short opinion: | |||
| http://www.thirtythumbs.com/PreviewBook.html | |||
| (note: The next paragraph is from a book. Does wikipedia have permission to use this text?) | |||
| ⚫ | Naked Short Selling is the illegal practice of short selling shares that may not even exist. Phantom stocks, ghost longs, and other forms of naked shorts flood the market with unaccounted-for shares, causing a devaluation of the legitimate share price of many companies’ shares. While it is likely that you may have heard the term “naked short selling” or been introduced to this problem, you may not fully understand the jeopardy to which this practice could subject your company. Once you are made aware of the potentially devastating effects of naked short selling and the costs it imposes upon the markets, small businesses, and investors, you will understand why it is an urgent issue that simply cannot be glossed over or ignored. Indeed, there is no more pressing issue than dealing with the failure of our securities system to provide authentic and accountable trading for investors. This scheme deprives companies of their ability to finance themselves and grow, it robs investors of millions of dollars in potential profits, and it costs the U.S. economy untold billions of dollars. | ||
Revision as of 22:08, 22 June 2005
A naked short is one in which a stock broker does not find the stock shares to borrow within 3 or 13 days. A retail investor is not allowed to naked short, but a market maker is allowed to have a naked short for "Bona-fide market making."
PRO naked short opinion:
In criminal penny stock fraud operations, retail investors are encouraged to buy a stock pushing it's value far beyond its true value. If naked shorting were allowed by SEC rules, other brokerages would step in and naked short the penny stock bringing it back to true value. In essence, SEC rules against naked shorting allows penny stock fraud operations to exist and make large profits. By making naked shorts illegal, volume of trading is reduced resulting in higher spreads and illiquidity.
Con naked short opinion:
(note: The next paragraph is from a book. Does wikipedia have permission to use this text?) Naked Short Selling is the illegal practice of short selling shares that may not even exist. Phantom stocks, ghost longs, and other forms of naked shorts flood the market with unaccounted-for shares, causing a devaluation of the legitimate share price of many companies’ shares. While it is likely that you may have heard the term “naked short selling” or been introduced to this problem, you may not fully understand the jeopardy to which this practice could subject your company. Once you are made aware of the potentially devastating effects of naked short selling and the costs it imposes upon the markets, small businesses, and investors, you will understand why it is an urgent issue that simply cannot be glossed over or ignored. Indeed, there is no more pressing issue than dealing with the failure of our securities system to provide authentic and accountable trading for investors. This scheme deprives companies of their ability to finance themselves and grow, it robs investors of millions of dollars in potential profits, and it costs the U.S. economy untold billions of dollars.