Skip to comments.Overstock CEO Comments on SEC's New Rules Against Naked Short Selling
Posted on 09/18/2008 5:59:35 AM PDT by devane617
Overstock.com, Inc. (Nasdaq: OSTK - News) chairman and CEO Patrick M. Byrne comments on the SEC's September 17, 2008 press release (see http://www.sec.gov/news/press/2008/2008-204.htm) that purports to protect investors against naked short selling. Dr. Byrne commented, "At the core of the SEC announcement is a decision that if a hedge fund naked shorts a stock, its broker isn't supposed to let them naked short again. But guess what: they were not supposed to naked short in the first place.
(Excerpt) Read more at biz.yahoo.com ...
Naked!?? I can’t look
Why should anyone be allowed to short a commodity that they do not have control of in the first place?
Naked CEOs? Hasn’t the country suffered enough?
After being turned down by Obama, Lindsay Lohan has found something she can do.
They’re letting it all hang out on this issue.
it should be illegal, and it is. but our absent sec looks the other way. the new rule will have little effect if the sec does not pursue the rule-breakers. our economy has been raped by the money grubbers on ws and we are now in a mess.
Dirty little secert is the SEC & DTCC receive transaction fees, whether the stock is delivered or not.
In other words, selling something they don't have. Short selling by itself is shady, this is beyond the pale.
Can someone explain to me exactly what shorting is and how one makes money off of it?
My understanding is that you believe the stock will sell lower in the future, but how does that translate into a profit?
The definition of shorting is that you don’t have the control of the particular security in the first place. You have to borrow it from someone to sell it. The practice of naked shorting is selling the stock without locating the shares to borrow. Technically it’s legal for the brokers (only they can really do this FOR a client), however there have been abuses of it.
Huh ? SEC gets transaction fees ? When ? Isn’t it a govm’t agency ? Aren’t we already paying their salaries ? This is first time I’ve heard of that.
What a load of BS. There is nothing 'shady' about shorting stock that you control.
Short selling is not shady. It’s a perfectly valid AND needed tool in the financial markets. You have to have people who bet the stocks can go down in the markets otherwise you don’t have an efficient market for a security.
Naked short selling is an abuse of the power brokers have to serve their customers.
“Lend them to me, I’ll pay you later” sounds personally shady to me. Sorry if I’m wrong, it’s just me.
I love this guy. Talk about a maverick!!! McCain/Palin should be talking to him to get the details on the corruption within the SEC. They could use a guy like Patrick Byrne, at least as a consultant in their adminstration.
Patrick Byrne has been fighting for a level playing field for small companies (and their investors) for many years at his own expense. Any advances made are due in no small part to his personall efforts.
Yes, it’s valid. I know that. Sorry, I didn’t expect to cause all this noise.
Short selling is borrowing the stock of a company and then selling it. If it goes up in price, you will lose money as you will have to replace the stock at a higher price. If it goes down, you will make money as you can now replace the borrowed stock at a lower price and keep the difference.
GE is trading at $23/shr... you borrow someone else’s shares and sell it. You get $23/shr.
If it goes down to $10/shr, you can buy GE on the open market to replace the shares you originally borrowed. The $13/shr difference in your selling and buying price is your profit.
In essence, it’s the inverse of the “buy low, sell high” strategy. In this strategy, you are buying high and selling low. You make money the same way but in the opposite direction.
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