Naked Short Selling

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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.
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net, monitors trading in all US stocks in real time and maintains massive databases of short sale and naked short sale time and sales data, short squeeze SqueezeTrigger prices, market-maker price movements, shareholder data, statistical data on earnings, sector correlation, seasonality, hedge fund trading strategies and comparable valuations.
When a trader short sells shares he doesn't own, it's termed a naked short sale.
They do not utilize the recently banned Credit Default Swaps or the Naked Short Sale which do destabilize the market and clearly contributed to the current financial crisis.
Shapiro states, "At any time, the DTCC could fully clear and settle every extended naked short sale or failure to deliver by doing what it once did routinely in such cases: Buy the shares itself in the market ("buying in") and charge the account of the naked short seller's broker.
In the event of a naked short sale, there are more electronic certificates than paper certificates until the naked short seller finds and buys stock to fill his short sale.
To address this situation, Signalife has engaged lawyers nationwide in order to assure that every naked short sale (4 days of non-delivery after sale) will be answered instantaneously by a lawsuit in the jurisdiction relevant to the brokerage house.
In the case of a naked short sale, the NSCC does not require the seller to deliver the shares -- as is the case with the Canadian naked short sellers, who hide behind IDA Rule 100, which allows them to short shares without borrowing them first.
In a naked short sale, an investor doesn't borrow the shares, but sells them anyway.
A naked short sale of stock occurs when short positions are not declared, shares are not borrowed to cover the short sale, shares are sold without delivering the stock to the purchaser or shares are shorted that are not marginable.
Under a naked short sale, short positions are not declared, shares are not borrowed to cover the short sale, and the shares are sold without delivering the stock to the purchaser.
Under a naked short sale of stock, short positions are not declared, shares are not borrowed to cover the short sale and shares are sold without delivering the stock to the purchaser.
The first is that it will be increasingly difficult for a potential selling broker to make an "affirmative determination" that there is sufficient stock in the system to cover a naked short sale order.