naked short

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.
References in periodicals archive ?
Regulation has also discussed naked shorting before; see "The Economics of Naked Short Selling" and "The Phantom Shares Menace" (Spring 2008).
announced that a similar naked short selling tactic had been utilized to potentially negatively manipulate the price of their common stock.
However, the ban on naked short selling is to continue.
Naked short selling refers to transactions in which traders sell stocks without borrowing them first.
I didn't bother to send him back to his work as I got engrossed in a TV programme on a ban imposed by Germany on naked short selling.
Germany has declared war on speculators, wrongfooting European partners who said they were not consulted about an overnight ban on naked short sales of a range of assets, that sent markets reeling.
It also clarifies ASIC's policy for granting relief to allow naked short selling in some circumstances.
After further review of our NOBO list which was ordered in February we have been made aware of potential major naked short positions in our company stock," said Rick Bailey, President.
The suit alleges an illegal scheme of naked short selling and lending of the Raser common stock, for the economic benefit of the Defendants and their clients.
In the previous issue of Regulation (Spring 2008), two articles were published on the issue of naked short selling and its effect in the marketplace.
OTC:ETMO) ("Extreme" or the "Company") is appealing to shareholders to participate in an effort management believes will significantly increase shareholder value and create a "share vacuum" for illegal naked short sellers.
Global Banking News-19 May 2010-BNP says German ban on naked short selling might not be effective without similar measures by the US(C)2010 ENPublishing - http://www.