Naked Short Selling


Also found in: Wikipedia.

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.
References in periodicals archive ?
5 million for violating Regulation SHO, an SEC rule that established a regulatory framework to govern short sales and prevent abusive naked short selling.
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.
Market supervisors in the European Union could be given powers to temporarily ban naked short selling of credit default swaps and shares in times of extreme volatility, the bloc's executive body said on Monday.
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.
A new fast-track law in Germany to introduce broad restrictions on naked short selling will be permanent.
On Tuesday night the German financial regulator, Bafin, moved to outlaw so-called naked short selling and the naked short selling of Credit Default Swaps (CDS).
LONDON -- Naked short selling is the controversial practice of selling shares without borrowing them first.
11, 2012 /PRNewswire/ -- Tim Connolly's Winning Strategies will feature naked short selling litigator Wes Christian, Overstock.
The work of the European Commission should also extend to the possibility of an EU-wide ban of naked short selling of all or certain shares and sovereign bonds as well as all or certain naked CDS on sovereign bonds.
The government had earlier suspending naked short selling in euro sovereign bonds and credit default swaps as well as stocks of some financial companies.