Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

REFR 1.610

-14.8%

Dec 2 3:59 PM EST

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To: Mike M who wrote (9194)	2/24/2003 2:10:23 AM
From: DanZ	Read Replies (1) of 10293

Regarding the buy-ins, why couldn't they have been forced to cover because they couldn't deliver the stock? UPC 11830 requires short positions to be closed within 10 days after settlement if the stock hasn't been delivered. The only exception is when the stock is shorted for bona fide market making transactions. Mike, you make a good point about single stock futures. In addition, shorting a single stock future doesn't necessarily translate into a short sale of the underlying security. If a speculator is willing to take the opposite side of the short sale, then the specialist working the order wouldn't have to short the stock as a hedge. I'm not very familiar with the trading mechanics of single stock futures , but would think that they work the same as other derivative securities such as options. If you buy a call or put option and another speculator or hedger takes the opposite side of the trade, the option specialist only acts as a middleman to complete the trade, and doesn't have to buy or sell the stock to hedge his position if he personally took the opposite side of the trade.

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