Re: Zipper -Baba - Zipper
in response to
by
posted on
Oct 05, 2012 04:48PM
Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Nice try Zipper but this subject has been gone over time and time again. Your strategy suggestion will not work, it's an old market tale. What does work is to keep shares in cert form and out of margin accounts but few do this and for good reasons. Please keep in mind that the vast majority of stock sold short is provided by long funds/institutions themselves to brokerge firms who borrow for Clients to short with. You might think this odd as why would those who are long make their stock available to those who want to go short. They do this because they are paid for the borrow of the stock so their holding generates some small revenue and because they own the stock and think it a valuable investment and believe the shorts are wrong and this will provide buying later when they must cover.
These same long funds can also recall their stock shares and force some covering or if they sell some of their position the shorts must also pay back the shares meaning they must either buy in the market or find someone else to borrow from.
Then naked shorting part of the market is much more dark and sinister and very hard to track and of course is illegal in the US but legal in Canada with the difference being in Canada your brokerage firm will make you cover in a short period of time because they will be called to deliver the stock that was shorted as there is a buyer on the other side wanting settlement. Some large hedge funds who are big acccounts might get a few more days to cover than us retail guys but not much. In the US some brokerage firms actually get stock clearing house to issue shares to cover trade settlements for a period of time and this actually increases the authorized float without company consent. Of course it's much more complex than this with SHO lists etc., in the US and way above most peoples pay grade in the mining business as the types of complex financial instrumments created and allowed on Wall Street is simply mind boggling with derivatives and CDO's etc. many on Wall Street don't even understand many engineered financial instruments including people like the heads of the big banks.
They even create new order types all the time and last I heard there were over 40 different orders types where there used to be about 10-12. The number of trading platforms has sky-rocketed in recent years and when you bring up different algos and index funds etc. and their complexity in this already massively complex system, I doubt there is anyone who fully understands the present system.
I will say this that I remember all the talk back in the late 1990's & early 2000's about a new economy based on financial engineering and new financial iinovation instruments and how it was going to change America and create tons of new jobs, well we have certainly seen the results of this financial innovation, nothing but gambling casinos with no one understanding the system, system nearly collapsed, brokerage firms operating like the Mafia, huge job losses, and main street hurt very badly. Brokerage firms used to generate capital to help build companies and generate jobs and economic activity today they run giant hedge funds and play at the casino everyday in the US.