RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Gold spot green overnight again...TG1960 wrote: Agree totally...when it comes to straight forward shorting one buys(borrows) and sells it at the market then buys it back at a later date at a lower price to return to the original owner for the profit....how does the naked shorting procedure work confuses me...aaarrrggg.
you are assuming they can buy back at a lower price. in a gold bull market the price may not go lower, it can continue going up and then they are forced to buy back at a higher price and lose money. there can be entities on the other side who want to make money off the shorts.
10 days of naked shorts or not, they eventually have to buy back the shares. maybe they can fool some weak hands in the short term, but covering their short pushes the price back up.
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another possibility is that some people use gcm as a hedge. sometimes gcm moves in the opposite direction of gdxj.