eTotalSource, Inc. (fka ETLS)

[Nullroute]

No. Because the MM has a certain amount of time to make due on the share by SEC regulations. So if they Naked Short, they have i think (i have heard 3, 14, 15, 45 days but am not sure of the actual number) number of days to return it. So there are technically no extra shares, just one is a IOU until the MM makes good on it, then it's no longer an IOU. That is why i believe it does not dilute the current float is it is not an actual share, but an IOU that the brokers see as shares. But then when the MM buys a share to cover it, that share is then removed as I have the share.

If you are interested and have about an hour, this guy does an awesome job at explaining shorting, and FTD's, and how the MM work, and play games, and etc. then view this video. He does a way better job than me explaining it.

He is talking about the corruption in our markets, but he does go over shorting, and naked shorts, and what this means, and how it works in the market, and etc.

www.businessjive.com