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So I think you do actually have it right. That's why you'll see careful commenters in this thread referring to "synthetic shares", which are like normal shares

So I think you do actually have it right. That's why you'll see careful commenters in this thread referring to "synthetic shares", which are like normal shares but come with that risk that you don't get it back. Except, if I understand correctly there are also laws around shorts which say that you are required to have the money to cover the share, which helps diminish the risk.

SigmundA 6y ago
"Synthetic Shares" just sounds like a fancy way of saying you have a loan on the books. Its like if I loan you money and saying now I have "Synthetic Money" in the form of the loan you owe me. Money people seem to love to make up new terminology to obfuscate the meaning.