Timeline for What would happen to short positions if one entity owns All the share and isn't selling? [duplicate]
Current License: CC BY-SA 4.0
19 events
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| Jan 30, 2021 at 14:34 | comment | added | Bob Baerker | @BCS -Yes, you can own a stock without a broker but most ways either indirectly involve a broker or they are extreme cases far from mainstream investing/trading. Yes, you can buy stock from a friend but how practical is that? Yes, you can buy stock in a DRIP but many of them commingle the funds and make a market purchase (via a broker) 1-2 times a month. But in most cases, you have to buy the 1st share or more from a broker in order to joining the DRIP (only a modest number of companies offer direct purchase from day one. Company stock purchase plan also works but limits you to one stock. | |
| Jan 29, 2021 at 23:36 | comment | added | BCS | I Googled for "can i own stock without a broker" and got a page full of "yes" (at least in some case, which it all that is needed). Besides, the players in a scenario like I'm referring to are likely not "everyday people". Even just using a broker that doesn't lend would be enough (e.g. accounts for investors who intend to vote shares). Furthermore, insiders (who could be legally prohibited from selling in some conditions) would be another way to construct the "zero liquidity" condition. | |
| Jan 29, 2021 at 23:29 | comment | added | Bob Baerker | @BCS - I don't follow you. Apart from insiders and possible over the counter pricate transactions between the big players, how do everyday people acquire shares without a broker? | |
| Jan 29, 2021 at 23:26 | comment | added | BCS | @BobBaerker Good point. But a quick check suggests that directly owning stock without a broker is possible. The concept of "own" is rather fuzzy here but that really doesn't change the core question. | |
| Jan 29, 2021 at 23:21 | comment | added | BCS | @NickAlger: interesting, though 1) I suspect the criminal charges depend on intent which is not assumed in the question 2) it sounds like in that case long position was willing to sell, just at exorbitant prices and 3) even if it would be illegal, criminal charges would likely take long enough to leave a window where the original question is still relevant. (Could you cross post that comment to money.stackexchange.com/questions/135605/…) | |
| Jan 29, 2021 at 22:41 | review | Reopen votes | |||
| Jan 30, 2021 at 0:24 | |||||
| Jan 29, 2021 at 22:36 | comment | added | Bob Baerker |
@BCS - If I buy a share and then loan it out, I can't sell it without getting it back first. No, that is incorrect. You can sell the shares immediately. It is your broker's responsibility to find replacement shares. If he can't, he 'demands' them back from the borrower and since they are non borrowable, the borrower must buy the shares to close in order to deliver them to the purchaser of your shares (or the broker does the buy in after 4 PM).
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| Jan 29, 2021 at 22:35 | comment | added | Nick Alger | Phil Falcone did roughly this in 2012, and was convicted of securities fraud as a result: en.wikipedia.org/wiki/… | |
| Jan 29, 2021 at 22:22 | history | edited | BCS | CC BY-SA 4.0 |
explain why this is not a duplicate.
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| Jan 29, 2021 at 22:14 | comment | added | BCS | @RobertLongson: I found that while writing my question: that setup is the same as I'm thinking of: but with the question being different. Rather than "who has the votes" or "how does a short squeeze play out", I'm considering the case where the shorts are (somehow) obligated to cover the positions and the longs refuse to sell, even when they hold every single share. | |
| Jan 29, 2021 at 22:14 | history | closed |
Robert Longson JTP - Apologise to Monica♦ |
Duplicate of Is it possible to own more than 100% of outstanding shares? | |
| Jan 29, 2021 at 22:10 | review | Close votes | |||
| Jan 29, 2021 at 22:14 | |||||
| Jan 29, 2021 at 21:18 | comment | added | BCS | What I've read suggests that a lender has some say in when a short position must be covered. httpss://www.investopedia.com/ask/answers/012915/how-long-can-trader-keep-short-position.asp How that influence is applied is not the point. | |
| Jan 29, 2021 at 21:13 | comment | added | BCS | I suspect there is an issue around the term "own". I didn't know the proper term, but "can sell immediately" is the defining criteria for what I'm referring to. If I buy a share and then loan it out, I can't sell it without getting it back first. And the people who can sell, not those who can't, will drive liquidity, which is the point I was getting at | |
| Jan 29, 2021 at 20:54 | comment | added | Bob Baerker | Some incorrect info. Every time Z buys 10%, he owns more of the float so 90+% of the stock cannot be owned by people other people. There is no loan term with shorting. Borrowers pay a daily borrow rate times the price of the shares that day (both fluctuate). There is no obligation to return it by a fixed date. If Z buys 100% of the float and assuming there are no other shorters, he will own 50% of the outstanding shares (total float plus synthetic long positions). | |
| Jan 29, 2021 at 20:33 | history | edited | BCS | CC BY-SA 4.0 |
edited title
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| Jan 29, 2021 at 20:31 | comment | added | BCS | @user253751 From what little I've looked up, they can, even if not all do. But if that's not possible for some reason, all that is required for the question is a way for Z to obligate the short positions to be covered within some time interval. | |
| Jan 29, 2021 at 20:28 | comment | added | Criticizing Israel not allowed | Do the loans have terms? I was under the impression they didn't. | |
| Jan 29, 2021 at 20:26 | history | asked | BCS | CC BY-SA 4.0 |