InterDigital Inc (IDCC)

[hock1]

sloane....I agree, one cannot assume that all shares involved in options arbitrage end up either short or long. There are too many permutations available to the short-term "investor" to draw any meaningful conclusions.
However, it is worth noting that if naked shorting is used at all, it creates some problems for those long investors who assume they are buying legitimate shares. For example, right now the use of naked shorting is allowed as long as the trades are settled in T+3. So in the process of trying to peg a stock at options expiration, manipulators (I use this word a lot, but I can't think of any other term for them), create phantom, or conterfeit shares that may or may not get washed out. Say you are a long term investor and bought 1000 shares (not legitimately borrowed by the seller) last Thursday from one who is trying to cap the share price. You actually are the owner of the "right" to own the shares. When the naked-shorter is done having their way with the stock, they buy shares to close out their position. There is no way of knowing whether the shares they bought back (within T+3) are real shares or phantom shares. In this case, being a long term investor, you are unlikely to sell the "shares" that you just bought. (I'll follow this up later)