4 ms·
It's quite difficult to stop without blocking all shorts.
by richardwhiuk 6y ago
It's quite difficult to stop without blocking all shorts.
- electrondood 6y agoWhy? My broker doesn't let me trade unsettled funds, even though I've made a sale and they're "in my account." How hard would it be to create a restriction that says you're not allowed to double-loan the obligation to return a share borrowed in a short sale?
- kgwgk 6y agoBecause when you buy a share on the market there is no notion of it being "a true share that someone sold to you" or "a borrowed share that someone sold to you". The only way to prevent double-lending is to prevent all lending.
- bluGill 6y agoHow do you know that the stock was loaned in the first place? If there is a way to know is there a way I can buy the original non-borrowed one - this should be worth more money because I can borrow it to someone else. It sounds simple, but the details make it hard.
- gowld 6y agoYour broker lends your share out. I borrow it. I sell it to Tom. I borrow the share from Tom's broker. Tom's broker and I both have no idea it's "the" "same" share I borrowed. Boom, 200% short interest on "that" share.