(Total Views: 275)
Posted On: 06/09/2017 8:11:44 AM
Post# of 72440
I have been unable to get a firm answer on this. I would have thought the name change alone would cause a little panic even among the legal shorts.
https://theintercept.com/2016/09/24/naked-sho...d-forever/
Once that CUSIP changes, the naked shorter has no apparent way to close out the naked short position. No stock under the old CUSIP number exists anymore; it all automatically converts to the new CUSIP.
Those trades can sit in the Obligation Warehouse forever, in theory. But the “aged fails” — essentially orphaned naked short transactions — remain on the naked shorter’s balance sheet as a liability to be paid later.
I am disappointed by this as I wanted to have this naked short business put to rest. Squeeze them if they're there under the water or dispel the myth if nothing happens. We'll see what the volume shows.
https://theintercept.com/2016/09/24/naked-sho...d-forever/
Once that CUSIP changes, the naked shorter has no apparent way to close out the naked short position. No stock under the old CUSIP number exists anymore; it all automatically converts to the new CUSIP.
Those trades can sit in the Obligation Warehouse forever, in theory. But the “aged fails” — essentially orphaned naked short transactions — remain on the naked shorter’s balance sheet as a liability to be paid later.
I am disappointed by this as I wanted to have this naked short business put to rest. Squeeze them if they're there under the water or dispel the myth if nothing happens. We'll see what the volume shows.
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All my posts are my own personal opinion and speculation. They should not be used as the basis for any investment decision. No, I am not Scottsmith.
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