I despise institutional short selling but especially high frequency trading with naked shorting. SEC will do nothing about this Some moron here on this board tried to tell me naked short selling is illegal. It is illegal but happens all the time. LINE needs to strike back at these crooked people
I have heard this argument made continuously and it might be a fine idea in theory, but I don't ever remember hearing it reported that a rise in the price of shares of XYZ conpany was caused by a sudden shift by investors of their shares to a cash account.
As long as YOU open a margin account, the brokerage firm can Hypothecate shares - whether you have a margin balance or don't have a margin balance. Its in the agreement you signed for the margin account.