InvestorsHub Logo
Post# of 251306
Next 10
Followers 20
Posts 1840
Boards Moderated 0
Alias Born 11/08/2009

Re: Rocky3 post# 213176

Thursday, 08/17/2017 7:20:17 PM

Thursday, August 17, 2017 7:20:17 PM

Post# of 251306
well, the way i understand the shoe is like this: so the squid (and friends) is supposed to sell 8 Msh fgen at 40.75. like you said, the squid has already lined up parties willing to buy the new printed shares which go straight more or less from fgen printing press to their new owners. that is how the sqid earns its fees from the process.

in most cases of secondaries however, the mkt price will fall below 40.75 and to prevent the mkt price from sinking too much below 40.75 (which will piss off the new owners and tarnish the squid reputation lol) the squid (and friends) will try to support the mkt price through direct intervention in the mkt. but these brokers have to be mkt neutral. after all they don't want to be stuck with an inventory of fgen sh. so to be mkt neutral, they buy to support and short it also. how they do it both , i have no idea.

thus if the brokers do need to even up their shorts, they use the shoe.

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.