4 ms·
So if two people owned one share, they could simply pass it between each other until their shorts are covered?
by midasuni 6y ago
So if two people owned one share, they could simply pass it between each other until their shorts are covered?
- ScoutOrgo 6y agoNot passed, but bought since the underlying price will have changed.
- treis 6y agoNot exactly, but yes. A single share can theoretically unwind all of these short positions. If we have A lends to B who sells to C who lends to D who sells to E who lends to F who sells to G. The reverse of the process will unwind it: G sells to F who returns to E who sells to D who returns to C who sells to B who returns to A
- bluGill 6y agoIt doesn't even have to be reverse. It can be G sells to C who sells to F->A->E->B->D just to make up a random order.