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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: jimsioi who wrote (12207)	2/24/2008 9:34:57 PM
From: aknahow	Respond to of 29622

jimsioi, can't tell if you are but are you in any way related to me? I have a growing feeling that you might be.

To: jimsioi who wrote (12207)	2/25/2008 12:57:49 AM
From: The Vet	Read Replies (1) \| Respond to of 29622

Jimsioi, the scenario I outlined does not need naked short positions to play out. The regular shorting process, borrowing stock in the traditional way, will produce the same result so we may not see any appearance of GLD on the reg SHO list or alternatively normal shorts can become naked by the normal action use to maintain GLD's parity with gold. The difference between GLD and other stocks is that the number of shares issued is dynamic. It can decrease or increase on a daily basis depending on the activity of the authorised participants. In my rather simple example which I put to George, legally borrowed stock can be traded and removed from the issued stock pool by the normal activity of the AP when he buys stock from a seller and redeems it for gold. The AP has no way to know that those shares were borrowed at some time and that they actually show as long positions in two different accounts. Even if he did know it makes no difference and he can redeem them, get gold to sell and have the shares cancelled. That action converts the "legal" short sale into a "naked" position without the lender or the borrower even being aware of the change in status.