Stock spilts and dividends.
This statement is not true.
"In order to get this stock dividend all shareholders have to have the Jyra stocks in their deposit, so they will go and ask their banks to be sure the stocks are in their deposit."
We only have to own the stock, you do not have to have the stock in cert. form. If you are the shareholder of record then you get the stock split or dividend. The shorts still have to cover at a later date. They have to cover and split shares or dividends that they were caught open with.
Say a short seller sell 1000 at $5 and the stock splits 2 for 1 later at $5, this means you now have 2,000 shares to $2.5 and not $5. If the short is given a short call (margin call) while the price is now $5 again after the split. Then the short has to cover with 2,000 shares at $5, and he has lost $5,000 dollars.
But lets say the stock spits at $5 and he had short 1000 shares before the split, and the stock sinks down to $1. The short decides to cover, he has to buy the 2,000 shares (split adjusted) at $1. His total cover is $2,000 and he pockets the difference of $3,000 dollars as profit.
Shorting is just a long share stock market, but going the other direction.
RG
OVIS cartel Leader. |
