sorry its not possible
It's not only possible, it's standard practice for Market Makers in the USA and easily done by the retail investor offshore (e.g., Canada).
You may think it's impossible but I have the trading receipts.
Naked shorts sell to any buyer.
Think about it this way. When you get a mortgage, your banker doesn't hand you 100K cash. It's the same with stock certificates, which are normally "held" at your brokerage. In a margin account, your broker can lend those shares out to anyone. How many times have you actually seen these stock certificates??? For most, it's never. For all intents and purposes, they only exist in theory. That's why they can be traded naked. As long as the shares are "theoretically available" you can short naked. Obviously, you can't trade an issue that doesn't have publically tradable shares.
When a Market Maker (or I) short naked, it's kind of like a promissory note. Someone buys shares that at some future point I must find and borrow, or purchase. It's all paper trading until someone either calls in their shares (i.e., asks that they be put in a cash account or asks that the certificates be mailed to the shareholder) or sells them. At that point, you the naked shorter either have to cover, or find the shares to borrow. Until then, you can sell all of the shares you want.
Remember back in the IPO days when 50 million shares would trade on a new issue with only 5 million shares in the float? That happened because the market makers were shorting naked. They made huge fortunes doing that. It's not illegal for the retail investor to short naked in the USA but the NYSE and NASDAQ don't allow it (but as I stated elsewhere, it can be easily done elsewhere). Why don't you check it out before you say "it's impossible?"
best...
LIG |
