Monk's Den

[steel_curtain]

Sure shorts are constantly being covered. If shares are borrowed from a MM you have to repay them. If MM's are shorting themselves then normal rules are a bit off. For example though, if you borrow 1 mil from an MM you get those shares transferred to your account. You then sell them, and lets say you sold them for .01/sh. Now you have 10k in your account. You need to repay the MM 1 mil shares. So, you have to buy 1 mil shares on the open market. Say you buy them at .005 and now you've paid 5k for 1 mil shares. Now you've paid 5k, and netted 5k profit minus trades and interest. Those trades are covered and off the MM's books.