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To: Catfish who wrote (17262)	1/26/2004 12:18:30 AM
From: Carl Worth	Read Replies (1) \| Respond to of 120415

yes, i understand the point of the new rule, as i stated in my post, however i disagree with your characterization of various types of shorts and their positions i'm sure that in some cases people who establish naked short positions feel that they have uncovered a completely fraudulent company, and think that the stock will go to zero, thus meaning that they never have to cover, but this happens with short positions established with borrowed shares as well however, i think much more often these naked shorts short the shares and then disparage the company through press releases and message board posts, hoping to drive the price down and then cover their positions lower...the only reason the lack of ability to borrow shares factors into this practice is that it allows them to short stocks that they would otherwise be unable to short....small cap and bb stocks lend themselves to this practice because they have little or no institutional coverage or sponsorship, and thus investors are more likely to believe uncontroverted negative information, causing them to sell en mass, which selling then feeds on itself, driving the price down...again, this happens with both naked and borrowed positions if someone truly feels that a company, and thus its stock, is worth zero, i don't think it really matters whether or not their position is naked, as they are making an honest "bet" on what they think the stock is worth...again, there are exceptions to this idea, as in some cases these naked shorts could actually help to cause the downfall of the company, if they attack the company and impair its operations, but if a person establishes such a position and simply allows the company to fail on its own, i don't see this as an underhanded pursuit certainly the widespread abuse of naked short selling makes this new rule a positive change, but to say that anyone who borrows shares is a legitimate short, and would not abuse the process by using misinformation to advance their cause, and that anyone who was able to short a stock without actually borrowing shares was absolutely crooked, is incorrect what truly needs to be addressed is the spreading of misinformation by shorts and their paid shills...this rule is more of a positive than a negative for the reasons i have cited, but it certainly won't solve many of the ills associated with short selling in its worst forms carl

To: Catfish who wrote (17262)	1/26/2004 6:32:23 AM
From: Rock_nj	Read Replies (1) \| Respond to of 120415

I'm sure naked shorting happens all the time with legitimate companies and with pennystock frauds. While the cats away the mice will play. I mean, if you're some MM and you see a great shorting opportunity (as I'm sure you'd see much more often than the average investor) why not short the heck out of it with as many shares as possible, even ones that don't exist (naked shorting)? The problem is this practice does beat down the price of stocks unecessarily. Shorting is fine, but people should have to stick to the rules to short a stock and short an actual share not a make-believe one (naked). This rule closes a huge loophole and will make the market a much fairer place to trade. People can still short, if they can actually find shares to short and companies won't have their stocks beaten down by naked shorting that really does nothing for the market and only benefits the naked short. Look for some massive short covering rallies in certain stocks in the week and days before the rule becomes effective. We should try to identify the best candidates, it could be a great opportunity to double or triple your money.