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Non-Tech : Radica Games (RADA)
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To: David who wrote (2825)2/23/1998 11:23:00 PM
From: Webster Groves  Read Replies (1) of 7111
 
David,

A market maker such as FAHN can short a stock "naked",
meaning no shares have been borrowed. This is allowed
to "facilitate an orderly market", but it's a privilege often
abused. The MM has a period of time (3 days I think) to
find shares to borrow, but this can be circumvented temporarily
by collusion with a second MM. I am not "in the business",
and perhaps someone like Stan or Skipard can fill in more
of the gory details. There must be a link on SI where this
is debated ad nauseam.

-wg

P.S Retail shorts must borrow shares before shorting. No shares,
no shorting. Also short positions can be hedged with options,
and it can obviously get very complicated. Also, don't take
the monthly short interest figures too literally. A shorter can
hide a position by trading in and out around the report date.
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