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They absolutely are not illegal. Shorts got greedy and got caught out. Should short sellers not have any downside to their trades?
by u10 6y ago
They absolutely are not illegal.
Shorts got greedy and got caught out. Should short sellers not have any downside to their trades?
- silexia 6y agohttps://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm. Control plus F "short squeeze". Intentional short squeezes like what is happening in GME is illegal.
- Tokelin 6y agoIntentional would be the key word. Would it be easy to prove it was intentional?
- simias 6y agoI don't know enough about this subject to form an opinion on the legality and morality of what's hapenning right now but if the only rub is whether the squeeze is intentional or not I recommend that you have a peek at the wallstreetbets subreddit right now. It's very much intentional and out in the open.
- stransky 6y agoThe article doesn’t explain why it’s illegal.
- noitpmeder 6y agoIt doesn't need to?
- alex_c 6y agoThank you, I’ve been reading about this all day but this is the first time I see this referenced. I guess the billion dollar question is, legally: does buying stocks in anticipation of a short squeeze, and communicating the same to others, count as manipulation?
- xmodem 6y agovery interesting link, thank you. The exact language is > Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal.
- scythe 6y agoIt seems like the key question is what qualifies as a scheme. To me, it seems like you need some kind of secrecy or deception. Also, can you use Clojure to cause a short squeeze, or... [ducks]
- sudosysgen 6y agoIndeed. It was all done out in the open. Someone said "if enough people buy and hold, there will be a short squeeze. For this reason, I'm long GME", which probably doesn't represent a scheme or manipulation, it's just simple facts.
- d1sxeyes 6y ago> a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal. The question I think would rotate around whether this is 'a scheme to manipulate', or simply identifying an opportunity to capitalise on Melvin's greedy position.
- unityByFreedom 6y ago> capitalise on Melvin's greedy position Oh please. As if whoever has their thumb on the social media scale isn't greedy. Greed runs the street in longs and shorts. You can invest modestly by diversifying and avoid all that.
- d1sxeyes 6y agoOf course. But the point I'm making is that in my opinion, the demand is being generated by Melvin themselves by having a position with so much risk, it's not artificial demand.