...We Welcome You To The Resverlogix HUB withIn The AGORACOM COMMUNITY!

Free
Message: Protecting shares from being borrowed by shorts

This is what I've found at http://www.contracts-for-difference.com/Borrowing-lending-shares.html

Q.: What can you do to prevent your shares holdings from being shorted?

A: Now what can the average personal investor do to stop their own shares being shorted, as believe me your own broker, if approached, WILL sell your own shares that they hold on your behalf as a nominee account.

There are two things you can do, the first is to certificate them but this is not obviously to everyone’s advantage but the alternative solution is simple. All you do is to phone your broker and put an order in saying that you wish to place your shares for sale at, for arguments sake, double today’s price. As they are 'on order' they cannot be lent out by your broker and in turn you are reducing the amount of 'free shares' out there that can be used for shorting purposes. And don't forget to move your limit order up when the price starts to recover, then, that way your shares can't be shorted - not much but helps :D.

Although an individual personal investor will not normally have enough shares to halt a concerted shorting attack, if a large number of holders did this it would reduce the overall amount of shares that they could get their hands on.

In my opinion well worth doing if not only for the knowledge that your own shares cannot and will not be used in a short attack against the very share that you own.

-------------------------

Also, point 8 in the article below is interesting as it could force a short-seller to reacquire shares at a higher price if they are not longer "available for borrowing". i.e. I as the original owner have now placed them up from sale (at a much higher price).

https://www.schwab.com/active-trader/insights/content/9-frequently-asked-questions-about-short-selling

----------------------

I'm sure there are ways for sophisticated shorts to get around this, but it seems to make the process a lot more difficult.  If my shares get bought for $20, I'm happy (right now).

 

masila

Share
New Message
Please login to post a reply