I made the following 2 posts on another site as many new members were coming to the board and I was sure most had no real clue as to "naked shorts" so I wrote the following. I had not posted them here as I know this board has mostly longs quite familiar with this subject but a friend asked me to post them here and I am gladly following his suggestion:
There is no way to verify "naked" shorts. Very quickly, naked shorts are when market makers (MMs) "sell" shares when there are no shares available for sale. They do this by supposedly "borrowing" shares from legal stockholders for which they pay a fee but how many of you have heard from your brokerage that they are "borrowing" your shares? Rest assured, brokerages are making an illegal FORTUNE every year lending out (for a fee) shares held by legal stockholders without the stockholders permission or knowledge of these naked shorts.( Do you know if your shares are being lent out for a fee? Have you been paid as you are supposed to be for this right?) But back to naked shorts, if those sell orders never materialize or "borrowed" shares are unavailable fro which the brokerage has already "sold" ghost or air shares (other names for naked shorts), the MMs are left with many orders sold that do not have a corresponding amount of shares offered to balance them out. Over time that can lead to a VAST amount of such "air" shares on the market. Overstock Corp found they had over DOUBLE the legal shares issued being traded on the market compared to their legally issued shares. Result is MMs can walk down the price to next to nothing (as .05 cents for IPIX shares) even though no legal stockholders are putting up shares for sale because they know by trading amongst themselves (due to T+2 trading) they can keep the "air" shares rotating between themselves and never have to square them up. That is why they are naked and non-transparent and why many who only throw out the "legal" short numbers to support their views are laughing behind their backs. They know naked shorts are one of the biggest money makers going for brokerages and illegal trading concerns (usally all being done by sophisticated mathematical algorithms). For those not familiar with shorts, the "legal" shorts are no problem and those investing in them are not looked down on by any long investor. I am only condemning "naked" short shares.
Would like to know any other reasoning as to how IPIX can be so under priced based on the projected value of its 2 drugs if both prove to be commercial, why there is so much and so viral an effort on many sites to denigrate the stock, why so many waste time deriding it when they have no skin in the game, how there can be such a disconnect between the science and lack of offers to date, why 240MM is thought to be such as outlandish share total when the revenue streams of the two IPIX drugs could be over $200B/yr, etc, etc. Is the potential of IPIX as large as some say - just do the numbers for the individual markets IPIX is going after. The potential is so large most true longs never give out their true estimates as to future share price as they would look to be beyond belief, but again, what if IPIX drugs can capture 20% of the $200B/yr market streams and IPIX gets a 15% royalty on all sales? That equates to $6B/yr of royalties with an employment of less than 10. Yearly costs would be minimal so if one takes $6B and divides by 400MM (I am going sky high for total shares to be very conservative) you would still get a yearly dividend of near $15/yr). That is $1.5MM /yr in dividends for every 100K shares owned. Note I have not even mentioned share price - what would one expect the share price to be if the dividends are $15/yr per share? One can thus see the numbers get so stupidly large nobody would believe them - BUT THEY ARE THERE IN ALL POSSIBILITY.
The govt testing of Brilacidin will be a chance for govt and the medical world in general to get a much better idea of the new branch of medicine, defensin mimetics, de novo drugs, that many feel will change the face of medicine. The old hit-and-miss method of arriving at new drugs is dead, super computers are the face of new drug candidates, and Brilacidin has been noted as the best of this new class of medicine. Willing to wait the next few weeks to see if Brilacidin excites the ultra-lab crowd (meaning the government) and the academic crowd (meaning the university testing B for corona) as to its many, many merits and its astonishing safety profile that has shown no negative side effects to date (if Brilacidin given in the correct dosage).
If it walks like a duck, quacks like a duck,......
=====================================================
Below post is in response to a question someone asked me in regards to the above post.
]
This is why you see so many yelling for a T+0 trading requirement for ALL stock trades. This means ALL trades must be squared up each day so it is known who bought and sold all shares. This is possible thru chain block technology, where no data can be rearranged in the files. All "naked" shorting would end and there would be a much more level playing field for all investors. MMs couldn't pass around the "naked" shorting, they would have to square up DAILY.
I have no source to reference, but I do remember seeing once that the vast majority of JPM and Sachs trading profits come from the "black pool", that realm of trading that has no transparency and IMO that is the naked shorting pool. Also, you see these hedge funds that make massive amounts of money. They also are major players in trying to drive start ups into bankruptcy. When a short has an open position in a company that goes bankrupt, they get to keep the funds they bought from their "sale" of shares TAX FREE as, once bankrupt, they never have to complete the trade by purchasing shares. That is why they work so hard to drive companies into bankruptcy. I hope some are realizing the treachery retail investing is up against these days, much less the computerized systems that are flipping shares incessantly to make a little profit on a massive amount of trades. Kind of like collecting all the pennies left over at the end of the day from all retail stores in the country.
The only current watchdog (LOL) for retail traders is FINRA and guess who funds FINRA? That's right, the very same MMs, brokerage houses, hedge funds, and large financial concerns who are so overwhelmingly protected by the system. The ol' proverbial fox guarding the chicken house. FINRA certainly isn't going to bite the hand that feeds them. They do have some window dressing fines from time to time, but when the penalty is but a percentage point or so of the profits, its just part of the cost of doing business. Only thing that would stop the illegality is if a large number of execs running these companies were thrown into jail for lengthy jail terms. But look at the POS Ponzi guy from NY who stole BILLIONS, he is looking to get out (there is actually a chance he may get out) now as he claims he is dying of cancer. Who gives a F if he dies in prison? I would hope he dies in the greatest of pain for the longest time possible for what he did to tens of thousands of families who put their trust in him to handle their retirement savings.
There is no way to verify "naked" shorts. Very quickly, naked shorts are when market makers (MMs) "sell" shares when there are no shares available for sale. They do this by supposedly "borrowing" shares from legal stockholders for which they pay a fee but how many of you have heard from your brokerage that they are "borrowing" your shares? Rest assured, brokerages are making an illegal FORTUNE every year lending out (for a fee) shares held by legal stockholders without the stockholders permission or knowledge of these naked shorts.( Do you know if your shares are being lent out for a fee? Have you been paid as you are supposed to be for this right?) But back to naked shorts, if those sell orders never materialize or "borrowed" shares are unavailable fro which the brokerage has already "sold" ghost or air shares (other names for naked shorts), the MMs are left with many orders sold that do not have a corresponding amount of shares offered to balance them out. Over time that can lead to a VAST amount of such "air" shares on the market. Overstock Corp found they had over DOUBLE the legal shares issued being traded on the market compared to their legally issued shares. Result is MMs can walk down the price to next to nothing (as .05 cents for IPIX shares) even though no legal stockholders are putting up shares for sale because they know by trading amongst themselves (due to T+2 trading) they can keep the "air" shares rotating between themselves and never have to square them up. That is why they are naked and non-transparent and why many who only throw out the "legal" short numbers to support their views are laughing behind their backs. They know naked shorts are one of the biggest money makers going for brokerages and illegal trading concerns (usally all being done by sophisticated mathematical algorithms). For those not familiar with shorts, the "legal" shorts are no problem and those investing in them are not looked down on by any long investor. I am only condemning "naked" short shares.
Would like to know any other reasoning as to how IPIX can be so under priced based on the projected value of its 2 drugs if both prove to be commercial, why there is so much and so viral an effort on many sites to denigrate the stock, why so many waste time deriding it when they have no skin in the game, how there can be such a disconnect between the science and lack of offers to date, why 240MM is thought to be such as outlandish share total when the revenue streams of the two IPIX drugs could be over $200B/yr, etc, etc. Is the potential of IPIX as large as some say - just do the numbers for the individual markets IPIX is going after. The potential is so large most true longs never give out their true estimates as to future share price as they would look to be beyond belief, but again, what if IPIX drugs can capture 20% of the $200B/yr market streams and IPIX gets a 15% royalty on all sales? That equates to $6B/yr of royalties with an employment of less than 10. Yearly costs would be minimal so if one takes $6B and divides by 400MM (I am going sky high for total shares to be very conservative) you would still get a yearly dividend of near $15/yr). That is $1.5MM /yr in dividends for every 100K shares owned. Note I have not even mentioned share price - what would one expect the share price to be if the dividends are $15/yr per share? One can thus see the numbers get so stupidly large nobody would believe them - BUT THEY ARE THERE IN ALL POSSIBILITY.
The govt testing of Brilacidin will be a chance for govt and the medical world in general to get a much better idea of the new branch of medicine, defensin mimetics, de novo drugs, that many feel will change the face of medicine. The old hit-and-miss method of arriving at new drugs is dead, super computers are the face of new drug candidates, and Brilacidin has been noted as the best of this new class of medicine. Willing to wait the next few weeks to see if Brilacidin excites the ultra-lab crowd (meaning the government) and the academic crowd (meaning the university testing B for corona) as to its many, many merits and its astonishing safety profile that has shown no negative side effects to date (if Brilacidin given in the correct dosage).
If it walks like a duck, quacks like a duck,......
=====================================================
Below post is in response to a question someone asked me in regards to the above post.
]
This is why you see so many yelling for a T+0 trading requirement for ALL stock trades. This means ALL trades must be squared up each day so it is known who bought and sold all shares. This is possible thru chain block technology, where no data can be rearranged in the files. All "naked" shorting would end and there would be a much more level playing field for all investors. MMs couldn't pass around the "naked" shorting, they would have to square up DAILY.
I have no source to reference, but I do remember seeing once that the vast majority of JPM and Sachs trading profits come from the "black pool", that realm of trading that has no transparency and IMO that is the naked shorting pool. Also, you see these hedge funds that make massive amounts of money. They also are major players in trying to drive start ups into bankruptcy. When a short has an open position in a company that goes bankrupt, they get to keep the funds they bought from their "sale" of shares TAX FREE as, once bankrupt, they never have to complete the trade by purchasing shares. That is why they work so hard to drive companies into bankruptcy. I hope some are realizing the treachery retail investing is up against these days, much less the computerized systems that are flipping shares incessantly to make a little profit on a massive amount of trades. Kind of like collecting all the pennies left over at the end of the day from all retail stores in the country.
The only current watchdog (LOL) for retail traders is FINRA and guess who funds FINRA? That's right, the very same MMs, brokerage houses, hedge funds, and large financial concerns who are so overwhelmingly protected by the system. The ol' proverbial fox guarding the chicken house. FINRA certainly isn't going to bite the hand that feeds them. They do have some window dressing fines from time to time, but when the penalty is but a percentage point or so of the profits, its just part of the cost of doing business. Only thing that would stop the illegality is if a large number of execs running these companies were thrown into jail for lengthy jail terms. But look at the POS Ponzi guy from NY who stole BILLIONS, he is looking to get out (there is actually a chance he may get out) now as he claims he is dying of cancer. Who gives a F if he dies in prison? I would hope he dies in the greatest of pain for the longest time possible for what he did to tens of thousands of families who put their trust in him to handle their retirement savings.
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