Digital Brand Media and Marketing Group Inc (DBMM)

[pennypauly]

Short Sales occur when a trader/broker or market maker sell stock they don’t own (by borrowing shares[9]), and only later acquires them to close-out the transaction”- the idea is that the seller (short seller) anticipates that the current price will fall and when they buy to close-out (return the shares they borrowed) they will profit from the difference. Naked Shorting is when the stock is “never borrowed and never purchased in the market to properly close-out the transaction”. Where there are constraints on borrowed short selling (e.g., cost of borrowing, Shortage of shares to borrow, the risk of a forced cover, the risk of the stock jumping in price, having to use proceeds from the short sell as collateral until the position is closed), there are no constraints to Naked short selling.[10]