Selling naked options and naked shorting are not the same thing.
Naked shorting (which is illegal) is the practice of short selling shares that have not been positively determined to be obtainable by the short seller. In the case of GME, the short position was at 140% of the total shares outstanding, so at least 40% of the shorting had to be naked shorting.
These hedge-fund fucks got greedy and instead of getting burned, they're getting bailed out by the brokerage houses.
I agree but that isn't "naked short selling" That is double bad naked short selling.
Naked short selling is usually used when referring to selling calls/puts when you don't have a position in the underlying stock which can create exactly the scenario of over 100% effective short position.
I get it, but we are talking 'legal' under color of law, they arnt really allowed to do what they did in this scenario. A guy like Melvin calls his buddy at JPM and borrows whatever he wants even if it doesn't exist, where as Foreign Aid is Theft tries to do that and JPM says "sorry bud, no shares available." When Melvin gets in a bind he gets to put out hit pieces and lies on CNBC, call up the exchanges and tell them to halt so he can figure out how to cover, and trade back and forth with the market makers to make up for his fake and real shorts et cetera. When Foreign Aid is Theft calls the broker and says "help im losing money" they say "lol investments carry risk dumbass."
The regulatory bodies look the other way because they all want to work for GS or whatever later and dont want to cause trouble, so as long as Melvin makes sure the books balance out at a later date then its all good.
If Melvin ends up looking like he will actually fail, the Fed will swoop in and declare that they must help because otherwise the entire economy will collapse or whatever bs excuse they use.
Yes, what you are describing is what we are all pissed off about:
Regulatory Capture
Even 2008 was the same. They created synthetic products with AIG, Merrill, Goldman Sachs, Bear Stearns and Lehman that took a very bad housing market and nearly created financial Armageddon so they could make some "bets".
Naked short selling is not illegal, literally anyone can do it. It is a risk that has a fixed maximum upside with unlimited downside though.
seriously wtf is he talking about. Naked selling options is stupid most the time, but definitely not illegal
Selling naked options and naked shorting are not the same thing.
Naked shorting (which is illegal) is the practice of short selling shares that have not been positively determined to be obtainable by the short seller. In the case of GME, the short position was at 140% of the total shares outstanding, so at least 40% of the shorting had to be naked shorting.
These hedge-fund fucks got greedy and instead of getting burned, they're getting bailed out by the brokerage houses.
So as long as I'm wearing underpants I can trade?
if you are shorting shares that DO NOT EXIST, then yes, that is illegal.
I agree but that isn't "naked short selling" That is double bad naked short selling.
Naked short selling is usually used when referring to selling calls/puts when you don't have a position in the underlying stock which can create exactly the scenario of over 100% effective short position.
I get it, but we are talking 'legal' under color of law, they arnt really allowed to do what they did in this scenario. A guy like Melvin calls his buddy at JPM and borrows whatever he wants even if it doesn't exist, where as Foreign Aid is Theft tries to do that and JPM says "sorry bud, no shares available." When Melvin gets in a bind he gets to put out hit pieces and lies on CNBC, call up the exchanges and tell them to halt so he can figure out how to cover, and trade back and forth with the market makers to make up for his fake and real shorts et cetera. When Foreign Aid is Theft calls the broker and says "help im losing money" they say "lol investments carry risk dumbass."
The regulatory bodies look the other way because they all want to work for GS or whatever later and dont want to cause trouble, so as long as Melvin makes sure the books balance out at a later date then its all good.
If Melvin ends up looking like he will actually fail, the Fed will swoop in and declare that they must help because otherwise the entire economy will collapse or whatever bs excuse they use.
Yes, what you are describing is what we are all pissed off about:
Regulatory Capture
Even 2008 was the same. They created synthetic products with AIG, Merrill, Goldman Sachs, Bear Stearns and Lehman that took a very bad housing market and nearly created financial Armageddon so they could make some "bets".