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Intentional naked shorting is illegal in most markets, including the US - so, no, they don't. Debt instruments and fractional lending are not an uncovered shor
by justinjlynn 8y ago
Intentional 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.