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To: Clyde Stone who wrote (730)	9/25/2006 10:11:45 AM
From: atm_prophet	Respond to of 1521

Shorting and naked shorting .... Subject 55464 Ted :)

To: Clyde Stone who wrote (730)	9/25/2006 10:16:02 AM
From: rrufff	Read Replies (1) \| Respond to of 1521

Shorting is legal - requires borrowing shares to be bought back later. Naked Shorting doesn't mean that an ugly NASD suspended old coot short is sitting without clothes. It refers to a prohibited transaction wherein no shares are ever borrowed. In microcaps, the MM is often suspected of abusing the exception which allows them not to close a transaction for a reasonable period of time. This exception is supposedly for the purpose of making a market. However, many suspect that it is actually used to line their pockets. This is a very simplified explanation and I'd urge you to study the topic as it is very complex, with the information needed to discuss often being hidden by the industry. I have a board here on SI where the issue is discussed. Also an excellent source of information is thesanitycheck.com.