Replies to post #58290 on Paychest Inc (PYCT)

[adanac]

Mfridge, to answer your questions

"In your scenario we have a group of people shorting, yet also those who have the power to naked short... So how do you figure the group who shorted in the first place (your average every short) also naked shorts as well? The theory involves 2 different entities- simple shorts and naked short market participants."

I just call it "a group" so nobody argues 'they can't do it' or 'it's against the rules for them' etc.
Believe me, ANYONE WITH MONEY CAN DO IT. Yes, you need a lot to get started, "I can't do it" LOL.
The difference between 'borrowing' and 'naked' from what I can tell, is basically your broker 'borrows' shares from a real shareholder (either another clients or another brokers client) and charges you borrowing fees. YOU are still responsible to maintain the MARGIN (35%) or get a 'CALL'. I think the only difference with 'Naked' shorting is the broker agrees to not charge you borrowing fees, but I would think maybe increase the Margin a few percentages (not sure on that tho).

IN EITHER CASE "YOU ARE IN TILL YOU'RE OUT"

ANY ONE THINK I HAVEN'T EXPLAINED IT PROPERLY.

Mfridge, right now the options that I sold 'naked', I don't own shares to cover, are increasing in price this morning, so I know my 'buying power' in my account will be lowered. If it goes below zero I have to put more C in my account, or SELL some of my other positions or they will take me out of the short position with a "MARGIN CALL". I would lose big time on the trade because I would have to pay the ASK, even though the shares are not even at the strike price.