BlackBerry Ltd T.BB

Should Borrowing Shares be Outlawed?

[Hedgetrimmer]

Hi. First timer here at SH & first ever post. I'm not the most knowledgeable and I always stand to be corrected. No problem. Been reading here for years but never bothered to join in.

Seems to me that the main cause of all problems is the fact shares can be borrowed. Why are brokerages allowed to do this? Is it for additional revenue streams (fees)? Why when you sign up for a brokerage do they not ask you if you wish to lend shares to anyone who can sell them at discount? Hedge funds make billions just by not owning a share. 

Someone said few days ago that the bubble would burst for GameStop holders once there were no buyers but that wasn't what happened. Didn't it burst when hedge funds and brokerages colluded to shut trading off for retail investors?

[ScottCanada]

Simple fact. Hedge funds should be illegal. It's like me sellng you a car that i don't own (crude analogy). Once everyone understands what they after and who they benefit only then will they be made illegal (hopefully).

[Hedgetrimmer]

Car analogy works for me. The value of something sold is whatever someone wants to pay the owner. I hope WSB and their kind don't stop. 

[Shoe]

Well let,s look at it from the surface with avaiable information, Short positions are reported every two weeks. Now is that what has transpired over those two weeks? Or is it simply the closing amount of that time frame. IE: say the position is x amount of shares as of last report and it goes up 1% on the next report.  Yet in btw these trading days it perhaps goes up by 5% etc and is covered

[blackhawk562]

This post has been removed in accordance with Community Policy

[Hedgetrimmer]

The biggest difference IMO is that it's your property that short sellers are trying to sell. If you allow it then ok. No brokerage has ever asked me if I'd go along with loaning my shares to someone else to sell so that when returned my shares are worth less plus the borrower profits. Maybe it's in the fine print and missed it.  My point in all this is that it's entirely my

[ScottCanada]

Hedge trimmer - exactly!

[Nakate]

When it comes to borrowing shares, the rule is if they are owned by you and not in a margin account that is using  the credit function to buy shares with they cannot be lent out period, only margin  involved stocks maybe borrowed because the brokerage has money in the game and technically owns part of the investment. Now do they all play by the rules, not likely and then theres naked

[Hedgetrimmer]

  Thought naked shorting was outlawed. So if the short seller can't deliver the shares he can still hit the sell button regardless but if a broker can't deliver shares to a retail investor to buy then they shut down the brokerage or limit? When has there ever been a severe shortage of shares to sell when market has momentum?

[Nakate]

[Uraniuman308]

Without the EXPLICIT consent of the shareholder, YES!