3 ms·
[deleted, misunderstood how this works]
by mmastrac 6y ago
[deleted, misunderstood how this works]
- plouffy 6y agoHow do you short ? You short by borrowing a stock, and selling it. Why would lending it instead of selling it be a naked short ?
- the_pwner224 6y agoYou can recall the shares you lent anytime. So if A borrows shares to short, and lends them out to B so B can short, if A wants to close their position they can tell B to give back the share. Not naked even though A has reloaned the share.
- greenshackle2 6y agoNo. Re-lending and naked shorting are nothing alike. Actually my example kinda sucked. What's more likely to happen is that B borrows the stock from A, then sells it to C. C then lends the share to D. C doesn't know or care that the share was already borrowed once, and the only way to prevent re-lending it that way would be to make shares non-fungible, which would break more-or-less everything (then again maybe that's your goal).