Breaking News: US Bans Naked Short Selling
September 17th, 2008 • Related • Filed Under
The SEC has just announced that as of one minute past midnight tonight, ALL naked short selling is no longer allowed on US stock markets. This measure will help to prevent speculators from driving prices downwards so quickly.
Anyone who is going to short a security must deliver the borrowed security within three days of the trade date, and this also applies to market makers.
For more information:
SEC bans naked short selling article on TheStreet.com
SEC puts naked short sellers on notice article on CNNMoney
Popularity: 4% [?]
Credit Repair - option trading<--Please click on the green Retweet button if you like this article and want to share it on Twitter!
You might like these Related Articles:
Brand designer ChristianAudigier have "KingofJeans" the reputation, previously served as Levi's and other major brand designer, [url=http://www.ed-hardy.cc]don ed hardy[/url] and ...
You're a good man for sharing that Preet. *knock on wood* 
That is HORRIBLE! I wanted to raise my deductible but my auto finance company kindly informed me that the ...
I've had a $2000 deductible on my car for the last decade. Zero claims means that I've come out ...
@Brian - thanks! It does get easier and easier once you get used to it. My first live interview felt ...
Great job Preet, you're getting better and better everytime I watch you. journalists and anchors talk so fast sometimes, but ...
The questions and statements I am about to write are wayyyy out of the range of the documents here - ...
Personally, I'm not happy with Questrade. Their customer service is one of the worst. Also, I tried to withdraw money ...
Comment by Mark Wolfinger on 17 September 2008:
“Anyone who is going to short a security must deliver the borrowed security within three days of the trade date, and this also applies to market makers.”
I hope this can be enforced.
But, applying this rule to market makers is insanity. If the MM is unable to short stock as a hedge, that MM is going to stop buying calls and stop selling puts. That will destroy liquidity on the option exchanges and bid/ask differentials are going to get even wider.
Comment by Jordan Clark on 18 September 2008:
Sorry, can you explain what is the difference of a “naked” short sell? Thanks!
Comment by Preet on 18 September 2008:
@Jordan Clark – no problem. A traditional short sale requires that the short seller first locate and borrow the security being. A naked short sale involves the seller having no intention of having that security borrowed.
@Mark Wolfinger – perhaps a better solution would be to reinstate the short uptick rule?