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Naked Short Seller

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Naked Short Seller
An investor who sells shares that he/she has neither borrowed nor made arrangements to borrow. Under Regulation SHO, naked short sellers must abide by a "locate" requirement and a "close-out" requirement. The locate requirement forces brokers to have reasonable grounds to believe that the short-sold security can be borrowed; the broker must document this prior to the security's sale. With some exceptions, the close-out requirement means that brokers who have failed to deliver a short-sold security for 13 days must purchase similar securities and present those instead. Naked shorting is very high risk.


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Rogers said Coastal may be the target of naked short sellers, who are collecting money by shorting the stock without actually locating the shares that are being sold short.
org/wiki/Self-regulatory_organization) The company management feels that Pink Sheets should remain neutral and not punish any company with the "traffic signals" once the company has identified a naked short seller publicly or when the company issues a forward guidance report to its shareholders.
Shares are often unavailable, however, for securities that are most popular with naked short sellers.
 
 
 
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