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Re:Counterfeiting Stock – Explaining illegal naked shorting ... by eru on Monday February 01, 2021 @06:30AM (#25987723)
You know that a put and a call combine to make a synthetic stock? See https://en.wikipedia.org/wiki/Put%E2%80%93call_parity

(If you write a put and a call for the same strike, you are basically in the same position as a short seller. If you buy a put and a call for the same strike, you are economically in the same position as an owner of the stock.)

Hence, you can't separate options from stocks.

Re:Counterfeiting Stock – Explaining illegal naked shorting ... by c1b on Monday February 01, 2021 @07:22AM (#25988025)
This is not entirely accurate. It is the same position as borrowing some amount of money to buy the stock. If I buy a put and call and the price at expiry is exactly that strike I am guaranteed to lose money.
Re:Counterfeiting Stock – Explaining illegal naked shorting ... by egwor on Monday February 01, 2021 @08:03AM (#25988259)
Agreed. One of the reasons is that the option has a risk and therefore there's a cost associated with managing that risk and taking on the trade.
Re:Counterfeiting Stock – Explaining illegal naked shorting ... by eru on Tuesday February 02, 2021 @03:36AM (#25998580)
Not quite. It's the 'risk-free bond' term that I dropped from my explanation of the put call parity.

To replicate the stock, you'd buy the call and sell the put. The risk exactly balances out in the sense that a total portfolio of 1 stock short, 1 call long and 1 put short would have zero risk and behave like a risk-free bond.

(If the risk premia of the long call and the short put would not exactly balance, you could make money with very simple arbitrage trades.)

Re:Counterfeiting Stock – Explaining illegal naked shorting ... by eru on Tuesday February 02, 2021 @03:29AM (#25998532)
Yes, my explanation dropped the bond term from the put call parity.
Re:Counterfeiting Stock – Explaining illegal naked shorting ... by freeone3000 on Monday February 01, 2021 @01:05PM (#25991337)
Economically, sure, but not literally. If you hold both a put and a call, for instance, you can't vote with them, or earn dividends. You would not say you're the actual owner -- whereas a short sale creates a negative actual stock.
Re:Counterfeiting Stock – Explaining illegal naked shorting ... by eru on Tuesday February 02, 2021 @03:00AM (#25998375)
And that's why voting rights get special treatment in share lending. Dividends are also handled by share lending agreements.

When we talk about naked shorts, they would still have to be covered before delivery (usually two days after the trade).

And when buying a normal stock, not from a short seller, you also can only vote once you take delivery. So everything is the same.