Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation

Re:Counterfeiting Stock – Explaining illegal naked shorting ... by codyb on Monday February 01, 2021 @07:31AM (#25988064)

Person A has burger. Person B borrows A’s burger and sells it to Person C.

Person D borrows Person C’s burger and sells it to Person E.

Still seems to work? Then, tomorrow Person B and Person D owe burgers to Person A and Person C.

If there is only one burger in existence, this will create demand pulling prices up I’d think.

[ Parent | on HN ]

Re:Counterfeiting Stock – Explaining illegal naked shorting ... by bveb33 on Tuesday February 02, 2021 @01:36AM (#25997983)

This is where the burger analogy breaks down in my opinion because it's a lot harder to deliver a fraudulent burger than a digital signature.

What can happen in real life is Person A and Person C are given a digital receipt confirming delivery of the burgers they were owed and that is the end of the transaction. To shield themselves from revealing potential fraud, the brokerage will charge a $500 fee if either of them ask for proof of their burger.

Now, while there may only be one burger in existence, it appears as though there are two, keeping demand artificially flat.

[ Parent | on HN ]