Thought I'd share the following I recently learned from an acquaintance who was a 'professional shorter':
Shareholders are not notified about a NOBO/OBO list unless they are shareholders of record… MMs and brokerages are also not notified.
The purpose of doing or having a NOBO list for a company is to meet requirements for an uplisting.
Does Not reveal which MMs are shorting or naked shorting the stock. MMs are allowed to short a stock with impunity and naked shorting is not illegal and happens every day offshore; is also legal here, provided you have big money accounts. Never need to cover.
A company will never be able to stop shorting, leverage or anything related to it and that’s why the OTC Markets can never retain any value. FINRA also protects the firms that are shorting because typically these securities don’t have enough equity to trade above their pay grade. And the SEC doesn’t care as trading is FINRA’s responsibility.
That’s how the system works… there’s fractional lending
Definition of ‘Fractional Reserve Banking’
A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.
Also know as “fractional deposit lending”.
Investopedia explains 'Fractional Reserve Banking'
Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. Today there are many safeguards in place to prevent such an instance from occurring again, but the fractional-reserve banking system remains in place.
Shareholders are not notified about a NOBO/OBO list unless they are shareholders of record… MMs and brokerages are also not notified.
The purpose of doing or having a NOBO list for a company is to meet requirements for an uplisting.
Does Not reveal which MMs are shorting or naked shorting the stock. MMs are allowed to short a stock with impunity and naked shorting is not illegal and happens every day offshore; is also legal here, provided you have big money accounts. Never need to cover.
A company will never be able to stop shorting, leverage or anything related to it and that’s why the OTC Markets can never retain any value. FINRA also protects the firms that are shorting because typically these securities don’t have enough equity to trade above their pay grade. And the SEC doesn’t care as trading is FINRA’s responsibility.
That’s how the system works… there’s fractional lending
Definition of ‘Fractional Reserve Banking’
A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.
Also know as “fractional deposit lending”.
Investopedia explains 'Fractional Reserve Banking'
Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. Today there are many safeguards in place to prevent such an instance from occurring again, but the fractional-reserve banking system remains in place.
