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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: The Vet who wrote (136710)	7/26/2008 2:51:40 PM
From: Travis_Bickle	Respond to of 306849

No that is not the case. When you place an order to sell 100 shares short, your broker checks with its clearinghouse to see if there are 100 shares available to borrow. Let's say clearinghouse has 10,000 shares available to borrow; after your order is executed it now has 9,900 available to borrow. The buyer of your borrowed shares now owns 100 shares ... but those shares will not be credited to his broker's clearinghouse immediately ... the trade will be cleared during the next three days. THAT clearinghouse now has 100 shares to lend. Where did we start? 10,000 shares to lend Where did we wind up? 10,000 shares to lend How do they manage to keep track of all this? Very fast bicycle messengers.