RE:RE:Short trades disclosure shoul dbe improvedI do not have a problem with short selling. There is a role that short sellers can play. What I am saying is that there should be more disclosure. Which should even the playing field between a short sellers & long shareholder. The secrecy gives the short sellers some protection & an edge. The system needs to be more transparent
The broker has a pool of shares. They lend shares from the pool. It is like you deposit cash in the bank the bank may give the same cash to other deposit holder or to borrower. They have a record that you have cash with them & can withdrawal whenever you want. At the time of withdrawal they will use their pool of cash to pay you they do not have to collect the loan. It is cash management. Brokers mange shares. They cannot prevent you from selling your shares at anytime. They may have bit edge on you if you use leverage / margin to buy those shares. Still they cannot stop you from selling whenever you want. However on the other hand they can call in loaned shares whenever they want which can result in a short squeeze if large number of shares are called in.
I recall last time Air Canada went bust the shares would not go down a certain point & they use to pop from time to time as a result of short squeeze & naked short covering. It was very close to restructuring date.
Like donor registry the shareholder should have the option to out, & the broker should not be allowed to use the shares for lending. Then he will not be able to lend restricted shares from their pool.
At this time only way you can prevent this is by having the share certificate with you. Which is not particle.
Instant disclosure of short sales can will even out the playing field for all players in the market.