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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies

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To: dvdw© who wrote (3692)5/16/2012 5:26:44 PM
From: dvdw©Read Replies (2) of 3821
 
Outtake Describing our characterization of the Broken Dealer Matrix from the Rolling Stone piece...
These hard-to-borrow stocks, stocks that cost money to borrow, are called negative rebate stocks. In some cases, these negative rebate stocks cost so much just to borrow that a short-seller would need to see a real price drop of 35 percent in the stock just to break even. So how do you short a stock when you can’t find shares to borrow? Well, one solution is, you don’t even bother to borrow them. And then, when the trade is done, you don’t bother to deliver them. You just do the trade anyway without physically locating the stock.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515#ixzz1v4Q7QYkr
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