Gatekeeper Systems Inc V.GSI

Shorting

[ramman1]

Is a very effective tool ,that one can use, and thus,''is not the problem''. ------- Very poor guidelines , and ''laxed'' rules around the strategy of shorting,is the issue as I see it .--------I dont short often ,in fact, very infrequently ,however, I have always done quite well ,on those very few occasions.

[GoldenArm]

Shorting stock is very risky as most traders know. I watched an interview with Jeremy Grantham on Bloomberg and he says there are only a handful of people who are experts at shorting the market and he advices against it. A lot of Hedge funds got burned because of the "Gamestop" incident and the fallout will be seen shortly. What's even more scary is that derivative trading is in the

[Torontojay]

This sort of reminds me of the lax housing rules they had in 2008 where anyone could buy a house with zero money down. This could be the unraveling of the stock market if this trend continues. I'm personally not a fan of shorting but there needs to be tighter controls in place. 

[Aarman4]

That's right ramman1, Shorting is an extremely risky tool available to us, and allowing shares to be shorted when they shouldn;t be is the major problem. It is an interesting time for markets should they consider some sort of regulation to help combat this in the future, let's hope it is appropriately made and not meant to stop the symptom instead of the disease. Cheers!

[checkup]

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[Aarman4]

The best part is, in Canada, there is no defense against it. You cannot remove your shares from the ability to be shorted.... On the flip side, the money they make doing that,(It is more  a vehicle to lend money at high interest to shorters via margin accounts), is likely helping to offset their brokerage fees which have dropped substantially in the last 20 years. Cheers!

[checkup]

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[davewho]

I asked TD some years ago what their policy was. Basically they said if you own the shares outright they will not lend them to shorts. But if you have margin owing on your account they say they own the shares so will lend them out as they see fit. And they don't differientiate between all the shares in your account. Now that was some years ago so may have changed since. You would have to ask

[Aarman4]

From my research, that is true davewho, problem being you likely do not own the shares outright. IF they are in street name(and I bet you a dollar they are), then you do not own them, you just own the rights to them, and they technically belong to street name, so TD can do whatever they wish with their shares. This is just what I have found, and it is why, in Canada, to my knowledge, we are

[davewho]

You could be right Aarman4. I never thought of it from that point of view. Do we ever actually own shares outright or not? Splitting hairs maybe. But when I called they seemed pretty specific that they look at the account and if it has say 50k$ in margin owing they will lend out 50k$ worth of shares. Any shares in the account. You may have used margin to buy company X but they just see it as money

[Aarman4]

Do we ever actually own shares or not? From what I understand, requesting a paper certificate will mocve the shares out of street name and have them certified as yours, but I also believe that it doesn;t stop the practice in Canada. In the USA, I was under the impression that the law dictated that you cannot "naked short"(possibly being proven otherwise right now ala gamestop etc), but

[ol_griz]

Of course, an unfair system needs to be adjusted but I find the calls for this pretty ironic after the Establishment hiding in the hedge funds has been ripping people off for years with little outcry.  Now the retail investor gets involved and it's all terrible. Reminds me of some excellent weed stores near me who, after years of hassles trying to stay open with constant police