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Is it actually illegal to do this (not should it be, is it)?
by xur17 6y ago
Is it actually illegal to do this (not should it be, is it)?
- kgwgk 6y agoNot at all.
- kahrl 6y agoWrong. https://en.m.wikipedia.org/wiki/Naked_short_selling https://en.m.wikipedia.org/wiki/Naked_short_selling
- detaro 6y agoAfter someone has setup a covered short, the stock they borrowed and sold is again on the open market, is it not? And thus could be lent out by the new owner, enabling a second covered short?
- kgwgk 6y agoI understood “this” to mean “borrowing [more stock that actually existed] and shorting”. As your link explains “Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing [...]”
- kahrl 6y agoYes. It’s called naked short selling. It’s been illegal since 2008. https://en.m.wikipedia.org/wiki/Naked_short_selling https://en.m.wikipedia.org/wiki/Naked_short_selling
- kgwgk 6y agoNo, your link is about selling shares you didn’t borrow first. What’s going on here is perfectly legal, as explained in that very same link: https://en.m.wikipedia.org/wiki/Naked_short_selling#%22Normal%22_shorting https://en.m.wikipedia.org/wiki/Naked_short_selling#%22Norma...