Weighing all of the pros and cons, Lee is still not selling America short.
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Well, no, not really, for shares of financial companies in markets which did not ban short selling also rose.
Germany also rattled the markets and its partners by introducing a unilateral ten-month ban on naked short-selling (when securities are sold that are not owned or borrowed, which is the practice in conventional short-selling).
It is not so much that short-selling rules were tightened last year: that merely brought Japanese regulations into line with America's.
While this is good for Apple, it seems clear that selling iPhones is not really a short term winner for the phone companies.
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Overstock.com's Chief Executive Patrick Byrne has been campaigning for two years to put a stop to deliberate naked short selling, not just in his own company's stock, and to clean up the trade settlement process.
In an efficient market, such as that for shares or foreign exchange, such price rises would be moderated to some extent by other investors selling short (selling something for future delivery that they do not currently own, in the hope that they will be able to buy it more cheaply later).
But short-selling should not be assisted by regulation any more than buying long should be advantaged.
Hedge funds may or may not engage in hedging or short- selling.
But precedent suggests a short-selling ban does not change the fundamentals.
The transactions were not spread against one another, but the short selling of both calls and puts effectively mimics a short strangle.
The nation has already banned so-called naked short-selling, where investors do not borrow the shares.
It does not help that many countries impose restrictions on short-selling (the ability to bet on falling prices).
The SEC has put some restrictions in place, namely registration requirements and the tracking of aggressive short-selling, but those are not enough.
Properties are not selling because what buyers are prepared to pay falls well short of what sellers are willing, or able, to accept.
Although the newly proposed rules would not address CDS trading practices, they would limit naked short-selling in several important ways.
Because this risk remains on the upside, I would not consider selling Apple at this time, except perhaps to take some short-term profits.
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Birch has always maintained that selling players is not a good long-term solution to solving a short-term fix.
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An investor can say he is pessimistic about the short-term outlook for stocks, but not actually be selling any of his current holdings.
He also rejected the banks' arguments that trade settlement failures do not create phantom shares, a central claim of the anti-naked short selling camp.
"Naked" short-selling is when a trader sells financial instruments he has not yet borrowed.
But the potential for short selling bans to actually cause more problems than they solve is not one that should be ignored.
Such share discrepancies can result from innocent errors or from something more: naked short sales of Pegasus stock, meaning a short-seller has not properly gotten dibs on shares to borrow before selling.
Last week, SEC Chairman Christopher Cox told a Senate panel that the agency was not ignoring speculation that traders colluded to bring down Bear Stearns in a swift short-selling raid in mid-March.
The ban covers "naked" short-selling, which occurs when a trader sells a financial instrument that has not yet been borrowed.
It does not matter what you are buying or selling when you began the position and why you are long or short.
Steve Forbes: But naked-short-selling to the lay person sounds like you're selling, you've not even borrowed what you're selling.
Naked short-selling also intensifies bear raids by making it easier for traders to short stocks, since they do not actually borrow the shares in advance.
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