short sales and “naked short” sales(裸卖空) The difference between short sales and “naked” short sales is that in “naked” short sales investors fail to deliver securities on due, while in short sales the delivery and selling are almost simultaneous (T+3). Short Sales1 (SEC definition) A short sale is the sale of a stock that an investor does not own or a sale which is consummated by the delivery of a stock borrowed by, or for the account of, the investor. Short sales are normally settled by the delivery of a security borrowed by or on behalf of the investor. The investor later closes out the position by returning the borrowed security to the stock lender, typically by purchasing securities on the open market. And brokerage firms typically lend stock to customers who engage in short sales, using the firm own inventory, the margin account of another firm customers, or another lender. In the U.S., in order to sell stocks short, the seller must arrange for a broker-dealer to confirm that it is able to make delivery of the shorted securities. This is referred to as a “locate”.2
Schematic representation of short selling in two steps. The short seller borrows shares and immediately sells them. The short seller then waits, hoping for the stock price to decrease, when the seller can profit by purchasing the shares to return to the lender.3 “Naked” Short Sales4 (SEC definition) In a “naked” short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard three-day settlement period. As a result, the seller fails to deliver securities to the buyer when delivery is due (known as a “failure to deliver” 1 2
SEC “short sales” http://www.sec.gov/answers/shortsale.htm 09/06/2011 WIKIPEDIA “Short (finance) – shorting stock in the U.S.” http://en.wikipedia.org/wiki/Short_(finance) 3 WIKIPEDIA “Short (finance)” http://en.wikipedia.org/wiki/Short_(finance) 4 SEC “Division of Market Regulation: Key Points About...
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