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Insmed Incorporated Message Board

  • joani_de_1 joani_de_1 Jul 20, 2007 5:32 PM Flag

    Our Basher Friends Are SHORTS about to be BURNT TOAST


    Short Selling Strategies Two Dozen Types of Short Sales By William Cate Published August 2002 [] []

    There are dozens of ways to sell short a stock.

    1. Traditional Short Sale: Borrow the stock against a fifty percent margin. This is the only type of short sale that can be squeezed when the share price moves up because the short seller must add money to their margin account.

    2. A Market Maker Short Sale: U. S. Market Makers are not required to make physical delivery of stock certificates when they sell it. They are assumed to be a repository of the company's shares.

    3. A Brokerage House Short Sale: This is a decision not to execute a buy order from a client, but show the stock as owned by the client on their monthly brokerage firm account statement.

    4. A Clearing House Short Sale: The Clearing House doesn't execute the buy order, but credits it to the brokerage firm client's account.

    5. A Naked Short Sale: This is where two brokerage firms agree to trade stock in a company with neither brokerage firm requesting physical delivery of the share certificates.

    6. An Insider Short Sale: This is when insiders with restricted stock use it to sell short their company. It's illegal. It was a common practice when the Regulation S Hold Period was 40 days.

    7. A Ferrari Short Sale: This is where a bloc of stock is purchased. The stock is converted to derivatives, thus factoring the stock one hundred fold or more. The short sale doesn't occur in the Stock Market, but the derivative owners are holding a short position.

    8. The DTC Short Sale: This is when Depository Trust Companies use the stock they hold to sell short that stock.

    9. The International Short Sale: Stock's created offshore. The company is listed to trade outside the United States (usually Canada). However the company is trading in the States. The shares are sold into the States. The Short Sale is moved to the Primary Country, where the local brokers can ensure that the short position will be covered by the listed company, if there is ever a successful short squeeze.

    10. The Arbitrage Short Sale: LTV - Scattered Securities is an example of this short play. The Court in the LTV reorganization determined the exchange rate for new shares for old shares at three cents. The Market didn't read the Court decision. The old shares traded far higher than the Court Ordered exchange rate. The short sale was done by selling old shares and buying new shares before the Court mandated exchange of share certificates.

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