Replies to post #377710 on Elite Pharmaceuticals Inc (ELTP)

[namtae]

This is confusing a retail customer brokerage account with how naked short selling occurrs

My broker is going to expect the correct number of bona fide ELTP shares to show up within three days, and when they don't, it becomes a failure-to-deliver.

There a multiple ways this is accomplished. One easy to follow way using the FTD scenario with MMs:

MM#1 naked short sells 2,000,000 shs ELTP
a few days later receives a call to deliver
MM#2 shorts 2,000,000 shs ELTP to MM#1, covering MM#1 deliver requirement
MM#1 is now flat
MM#2 maintains the naked short of 2,000,000 shs
rinse and repeat