Digital Brand Media and Marketing Group Inc (DBMM)

[janice shell]

No, it is not. If you or I tried it, we'd have to deliver the shares we'd borrowed.

MMs, however, are allowed to sell naked in order to provide liquidity. Contrary to what many people believe, MMs don't usually keep big inventories, even of popular stocks. And so when they get a lot of orders to buy ABCD, they can and will sell "nonexistent" stock to people like you. Needless to say, others will have entered sell orders to take profits, and so very soon, the MM will be able to cover his naked short.

That activity accounts for most of what you see in the daily volume reports.

Remember also that MMs are required to go against market sentiment. When investors want to buy, the MMs have to sell to them. That's where naked shorting comes into it. When investors want to sell, the MMs have to buy their stock.

The MMs do have some advantages: they can buy on the bid and sell on the ask. But in some cases, making a market can be risky.