OT Longinvestor 98...Okay, I'll bite.
There are unintended shorts who sold all their stocks and risk their capitals in Call option in hope to win the lottery. And there are professional shorts who nakedly short and use the capitals elsewhere.
How does one become an unintended short by selling all of the (presumably) long stock he has? I get the part about winning the lottery.
Sustained Naked shorting is not as prevalent as it was a couple of years ago. While Reg Sho is a pathetic attempt to halt the abuse of naked shorting, it does limit the amount of stock that can remain an FTD (Fail to deliver). In other words, large amounts of shorted stock cannot remain as FTD's. Therefore, the capital is not available to use elsewhere. On the other hand, naked shorting, of limitless amount of stock can be sold AS LONG AS it is bought back within T+3 OR long stock is delivered within that timeframe. I have harped on the unfair aspect of this (i.e., legal free-riding for short traders)) ad nauseam.
That's all the time I have for this discussion. Thanks.
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