Re:Launch HN: Double (YC W24) – Index Investing with 0% Expe...
by slt2021 on Tuesday December 10, 2024 @05:31PM
(#42382359)
you will receive share in your name in a database, but physically it will be stored "in the street name" in the depositary house, of which there is only one.
plus even if there is only a single share authorized for stock exchange, there will be more than one in the float, due to synthetic shares: created when shares are borrowed and then reshorted, created to support derivative market (selling calls and buying puts). ALso borrow/rehypothecation mechanics is recursive, since shares are fungible, I can recursively re-borrow and re-short the same share, creating synthetic shares out of thin air, supported by nothing other than some bytes in the database somewhere, and not physical shares
Re:Launch HN: Double (YC W24) – Index Investing with 0% Expe...
by wbl on Tuesday December 10, 2024 @05:47PM
(#42382533)
The prime broker has a lot of money and will cover their customer blowing up in a net short position. They manage that with margin agreements. That isn't nothing.
plus even if there is only a single share authorized for stock exchange, there will be more than one in the float, due to synthetic shares: created when shares are borrowed and then reshorted, created to support derivative market (selling calls and buying puts). ALso borrow/rehypothecation mechanics is recursive, since shares are fungible, I can recursively re-borrow and re-short the same share, creating synthetic shares out of thin air, supported by nothing other than some bytes in the database somewhere, and not physical shares
https://news.ycombinator.com/item?id=26011135