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Re: madcabbage post# 6386

Friday, 05/04/2012 2:04:22 PM

Friday, May 04, 2012 2:04:22 PM

Post# of 15297
Mad-
They don't have to come from anywhere--- until the shorts have to deliver.
In other words, they can sell shares they don't own, on the promise they will deliver them by a certain date.

It is not illegal- it is called "naked shorting" meaning they are selling shares they don't own. "Covered shorting" is selling the right to buy shares that you DO own, and is a way to maximize revenue on shares you hold, at the risk of losing them.

Naked shoring is risky, but not illegal. It must pay off on a regular basis for these guys, or they wouldn't do it.

But every once and a while--- like on our little AGIJ--- they can get caught in a squeeze, where the price stops dropping, and they have to cover at prices higher than where they sold.

NICE for US!!