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Naked Short

   Also found in: Wikipedia 0.01 sec.
Naked Short Selling
The sale of shares one has neither borrowed nor made arrangements to borrow. Under Regulation SHO, investors engaging in naked shorting much 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.
naked short
The investment position of the underwriting firm for a new issue when the underwriting firm has sold more shares short than will be issued. A short position prior to the issue permits the underwriter group to stabilize the price of the stock by becoming buyers immediately following the deal. A naked short allows the underwriting firm greater stabilization ability. See also greenshoe.
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One prominent example of cheating the system is known as naked short selling.
Why Is Naked Short Selling both Illegal and Common Practice? by Amy Vincent / Finance and Investment community
Naked short selling refers to transactions in which traders sell stocks without borrowing them first.
Japan to extend ban on type of stock short selling until late July by Japan Weekly Monitor
Japan will impose a ban Tuesday on naked short selling of stocks to try to stabilise Asia's largest bourse amid the worst financial crisis in decades, the finance minister said.
Japan restricts short-selling after stocks plunge by AFP / AFP Asian Edition
 
 
 
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