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Also, the act of asking for those shares back could raise the value, creating a negative feedback look. Disastrous for the short seller. Why might we see lots
by jbigelow76 7y ago
Also, the act of asking for those shares back could raise the value, creating a negative feedback look. Disastrous for the short seller.
Why might we see lots of shorts being asked to return the shares back? Due to the large amount of shorting and the bank wanting those shares for other purposes.
That's very interesting, are there mechanisms that prevent large shareholders like hedgefunds or banks from loaning out shares and then purposely pulling them back to create the negative feedback loop you mentioned? It sounds like a situation open to abuse.