Harold: MM's can, and do, short stocks they make a market in, usually in an attempt to keep it under control. If I'm not mistaken they don't necessarily have to close these positions out at the end of the same day they initiate them. If memory serves, I posted an article some time back(I'm using a friends machine hence cannot access it right now) here on the VLNC thread which was an articulation of MM methodology as it relates to shorting, etc.. Indeed, the gist of the article strongly implied MM's oft-times don't have an intrinsic understanding of the company's business, they're just there to insure a proper market is maintained. Of course in light of all they can do with the power they have, much of "evil", heh, intent is proscribed to their action, particularly by those on the receiving end. ;-)
This is not to say they won't run a short under the command of someone else, but it's that someone else who'll reap the positive, and negative consequences. They're just the "go-between". Anyway, just some thoughts. One question. You made a VERY interesting statement about VLNC no longer being defined as "shortable". To which I say..."Whaaaa?" Is this true? It'd certainly go a long way towards explaining some things, but where did you hear this? And can anyone confirm?
Regards!
John~ |
