Saturday, June 26, 2010 5:14:23 AM
I have to disagree with this part:
I think quite a number of trades are basically "settled" within the same day. If the funds are processed electronically, and the certificate is held electronically, and the seller actually holds the certificate, there's no reason to delay this type of transaction.
There is a standard three day window in which the trade is supposed to be settled (hence why with most brokerage firms you have to wait three days for the transaction to "settle" before you can sell the security.) Typically if the security isn't delivered within the three day period, we have a "failure to deliver," which sometimes (not always) is indicative of naked-short selling.
The truth is I don't know, you don't know, and most likely no one besides the buyer/sellers of these transactions knows why/how these shares are being shorted. We can only guess and speculate.
From the SEC website.
Lots of good information about settlement periods and shorting from the SEC's website.
http://www.sec.gov/investor/pubs/tplus3.htm
http://www.sec.gov/foia/docs/failsdata.htm
http://www.sec.gov/spotlight/keyregshoissues.htm
IMO the SEC is the final word on this, not some thing some guy said on a message board.
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