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[deleted, misunderstood how this works]


No. Re-lending and naked shorting are nothing alike.

Actually my example kinda sucked. What's more likely to happen is that B borrows the stock from A, then sells it to C.

C then lends the share to D.

C doesn't know or care that the share was already borrowed once, and the only way to prevent re-lending it that way would be to make shares non-fungible, which would break more-or-less everything (then again maybe that's your goal).


You can recall the shares you lent anytime. So if A borrows shares to short, and lends them out to B so B can short, if A wants to close their position they can tell B to give back the share. Not naked even though A has reloaned the share.


How do you short ? You short by borrowing a stock, and selling it. Why would lending it instead of selling it be a naked short ?




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