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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (55049)	9/29/2001 4:10:04 PM
From: Rande Is	Read Replies (4) \| Respond to of 57584

Kodiak, I really don't have the time to teach a lesson on how short-selling works globally. And as I've said dozens of times here, I have nothing against short-selling, when it does not break the law. Naked short selling exists, whether you choose to believe it or not. It is illegal most places and is even punishable by jail or death in some. It has already been proven that United and American airlines saw a dramatic increase in short-positions and puts on September 10th, the day before the attack. . . the same time the RE-insurers of the World Trade Center saw a sharp increase in short-positions. It is said that there were potentially billions of dollars made off the short-selling of U.S. companies ahead of the attacks. I heard that at this point there are currently 3 trillion shares short U.S. stocks and certainly there is more short-selling going on right now than at any time in our lifetimes. The fact that so many of them are naked, places an artificial imbalance on the markets. I have heard of stocks having short-interest 10 times the public float. Tell me how that is fair and equitable. You asked about the SEC going overseas to enforce rules against naked SS or other types of foreign transactions. I am rather shocked that I would have to explain this to you or to anyone. When you trade a stock overseas, it does not physically trade to the foreign country, unless you call in your certs. The Nasdaq and the NYSE are still in New York. There aren't little Nasdaq kiosks set-up in third world countries. So the SEC, the NYSE and the NASD have FULL AUTHORITY over all trades of American stocks. They still say what can and cannot be done with American stocks. I hope that satisfies your need to learn what's up with short-selling overseas. Here is a letter that another reader sent in, that is sure to teach you some finer points of how short-selling works. See ya. . . =============================================== Hi Rande....... > Looks like you have a hot one on your hands. Very complex but simple procedure. > Most people misunderstand the way and why it's done. But as you know a margin acct. is first ,stock must be available next,uptick + and 0, for public customers. > MM allowed, but under different rules of NASD,drawing down from DTC and from size of drawing pool,but only for the purpose of maintaining orderly market, > intentional or not with customer orders coming first.Some MM's trade only for the house,others are institutional only and some house and public retail. They are not all > the same. Nothing wrong with shorting under the proper rules,but naked shorting is in itself harmful because it artificially enlarges the capitalization and public float > of a company's stock. There is only one reason to buy but many to sell,and many to sell are very legit-- need money for whatever.Naked shorting just takes > guts and time to move a stock down and profit handsomely. It's done all the time. MM's know how > and do get burned once in a while but they know where all the bones are buried, if you know what I mean. Naked shorting should be stopped but I don't know if it is at all possible. Sorry if this is long winded but hope it helps a little bit. Regards, XXXXXX