Naked shorting of single stock futures
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daphna
Apprentice
Joined: 02 Sep 2005
Posts: 7
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 Posted: 07/21/08 - 05:29 Post subject: |
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| Hello there everybody. My name is Amanda and I would appreciate if you could tell me something about naked shorting of single stock futures. Can any of you explain this to me what is naked shorting? How does it work? Thank you in advance for your posts. I am looking forward to them. |
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thaddeus
Apprentice
Joined: 21 Jan 2005
Posts: 4
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| Posted: 08/19/08 - 21:18 Post subject: |
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| Hello Amanda. Here is what I can tell you about this. Naked shorting (or naked short selling as it is also known) is method when you trade shorts but without previous borrowing the shares. Short selling is when you are selling shares without actually owing them. Seller actually borrows securities from institutional investors when they expect prices to rise. Well, in case of naked shorting, seller does not arrange that borrowing previously. Naked shorting can be illegal if it is designed to pull the prices down. There are some proposals to further curb down naked shorting. That is all I know about this. Take care! |
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