Replies to post #45940 on AMC Entertainment Holdings Inc (AMC)

[Stockman1010101]

Dumb question. So when a hedge fund is margin called or closes a short position all short shares AND naked shorts must be closed correct?

So if there's say 5 billion synthetics created and 1 billion were used to create a short position they would be closing the regular number of short shares PLUS the 1 billion naked short shares?

Or do all synthetics created PLUS the naked shorts have to be accounted for?

Lets get an understanding. Synthetic shares do not exist on any list to be filled. They only exist when a short is closed the short holder needs to buy x number of shares. Whether they are real or imaginary, so to close the short position the holder must buy the shares back.

Synthetic shares implies that the MM that sold the short to the holder did not check if the shares are available to borrow. Implying they could be unreal/imaginary/synthetic/counterfeit/etc.
One can not trade synthetic shares like they are real shares. They exist for closing short positions only.

Does that make sense?