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In finance, uncovered short positions happen all the time. Short selling and the options market being prime examples. Also, most debt ( especially fractional f
by porpoisely 8y ago
In finance, uncovered short positions happen all the time. Short selling and the options market being prime examples.
Also, most debt ( especially fractional fiat debt ) is an uncovered short position. When you are lending something you don't have or own.
- justinjlynn 8y agoIntentional naked shorting is illegal in most markets, including the US - so, no, they don't. Debt instruments and fractional lending are not an uncovered short position in that one generally is insured in commoditised bond markets against losses due to the non-systemic default of one or a few parties. The money exists, it just doesn't now, but absolutely will exist in the future. That's the difference between debt and naked shorting.
- twic 8y ago>> In finance, uncovered short positions happen all the time. Short selling and the options market being prime examples. > > Intentional naked shorting is illegal in most markets, including the US - so, no, they don't. It's illegal for cash instruments - actual shares and government bonds - but not for futures and options.