Naked Short Selling?

Discussion in 'Stock Market Education' started by ActivelyLit, May 6, 2014.

  1. ActivelyLit

    ActivelyLit New Member

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    I'd like to hear what others have to say on the subject of Naked Short Shorting and other forms of economic warfare. For a good description of naked short selling, you can watch this presentation by Patrick Bryne, CEO of Overstock.com:

    [video=youtube;aGyPQ_cO6l8]https://www.youtube.com/watch?v=aGyPQ_cO6l8[/video]

    "Published on Dec 19, 2013
    On December 17, 2013, Patrick M. Byrne, Ph.D., Chairman and CEO of Overstock.com, discussed "Naked Shorts, Bust-Outs, and the Once and Future Cataclysm: Economic Warfare as an Instrument of Transnational Organized Crime."

    John Lenczowski, Founder and President of IWP, offered a brief welcome, and Frank Gaffney, Founder and President of Center for Security Policy, introduced Dr. Bryne."



    I need to re-watch the video myself. I'll report back after I've done some more research. I would like if someone could lay out how short selling works in simple layman terms that anyone would understand. If no one replies, I will write the response in a few days.

    I'm also looking for any information on slop within the stock exchange, ie transfer of stocks taking three days to get from place to place when the information actually moves almost instantly via computer networks. Why does is that stock is allowed to bounce back and forth between these computers for days at a time for seemingly no reason that I can see? If someone has answers, I would like to hear from you!
     
  2. wanderingwildman

    wanderingwildman Well-Known Member

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    It is quite scary how long it takes the money to move. I am quite certain somebody is making money off this scheme somewhere. There are so many scams out there. You just have to deal with it unfortunately
     
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Are you talking about the "settlement date"? The 3 day period from the time you sell to the time the cash is available?

    http://www.investopedia.com/terms/s/settlementdate.asp

    Re: short selling... You're better off using puts instead of actual short positions from a risk management standpoint. Your potential loss with a short position that goes against you is theoretically unlimited, whereas you're only out the relatively small amount of $ you paid for the put option if the price of the security goes to the moon.
     

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