GREY:BZAMF - Post by User
Comment by
UserErroron May 10, 2018 12:21pm
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Post# 28012193
RE:RE:RE:naked short selling
RE:RE:RE:naked short sellingYes, they can do that. It's not naked shorting though. The broker is lending your shares out to someone that wants to cover their short sale with shares.
Naked shorting means you don't actually have the security. The broker does not lend your shares to the short seller. So what is the short seller selling? Nothing, they are selling imaginary shares on the open market. This increases the float and can drive the share price down.
Again, naked shorting doesn't happen very often because technology makes it very easy to track. If a short sale is not covered with actual shares by settlement it's a huge red flag (Failure to Deliver).