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 ?
More recently, the use of naked short selling, where a stock has not been lent prior to the sale, has likewise added to the continued negative perception of short selling.
Regulation has also discussed naked shorting before; see "The Economics of Naked Short Selling" and "The Phantom Shares Menace" (Spring 2008).
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.
The introduction of naked short selling for instruments listed on the Warsaw Stock Exchange (WSE) in July will "change the landscape" for participants in Poland's financial markets, according to the exchange's head of derivatives.
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.
Last month, Germany unexpectedly banned certain types of naked short
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.
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.
MEANWHILE, BACK ON EARTH: Byrne is part of multiple lawsuits charging that naked short selling--investors selling stocks they didn't own or intend to buy--cut into Overstock's share price.
Since a company first appears on the naked short list when short sellers have been failing to deliver for 5 consecutive trading days, SPNG should theoretically never be on the naked short list again.