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A comment on Naked shorting: The curious incident of the shares that didn't exist (2005). Parent comment

Re:Naked shorting: The curious incident of the shares that d... by jkhdigital on Sunday January 31, 2021 @07:55PM (#25984359)
That... seems gimmicky. Like using repurchase agreements to pretend that your balance sheet looks cleaner than it actually is.
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Re:Naked shorting: The curious incident of the shares that d... by fractionalhare on Sunday January 31, 2021 @09:04PM (#25984806)
It's not really about presentation of balance sheets, it's about liquidity. The explicit purpose of market makers is to provide liquidity, so they have a special exemption to buy and sell shares without being certain they exist. They have to have a good faith belief they will exist though. Usually they're right. Occasionally they're wrong.
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