SHO is working, Christopher Robin, as you would understand if you bothered to check the data. Fails to deliver as a percentage of market volume have declined by 50% since it was implemented, and the dollar volume of fails on any given day has gone to $2 billion from $3 billion. OTC stocks that make the SHO list are generally zero volume shells, with none of the vocal naked short companies like Valinoti's JAGH showing up. No duh.
SHO reliably indicates stocks with threshold fails, although it is actually biased toward over-inclusion on OTC stocks because they are generally diluting rapidly and SHO is using a stale OS for the threshold calculation.
Have you read Sho, Chrissie? It doesn't force closeouts in threshold stocks, it simply prevents future short sales by the failing seller's account. Closeouts are, of still available as they always were by request of the contra to the seller. Under those procedures the NSCC will enter the market, buy the shares for delivery, and charge the seller.
In most cases that doesn't happen, because most fails are at the broker dealer level and result from options MM hedging, and not at the retail account level where fails are so rare as to be virtually non-existent. From a broker dealers perspective they could give a skit less, as long as the contra is adequately capitalized.
CMKX isn't on the SHO list, Christopher Robin. It never has been, and anyone claiming a massive naked short in a one legged pink stock that never closed above .001 has a major misunderstanding of how the market works.
And you've already been revoked.
There are no stupid questions. But damn, there are a lot of stupid questioners!
