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Ebix Inc. Message Board

  • whistleblower337 whistleblower337 Mar 6, 2013 2:13 PM Flag

    Borrow Fee going exponential

    On the AQS system for 5 March the fee to borrow was 20.22%. Its been around that level for a week or so. For 6 March the borrow fee is 32.68%. Damn those shorts need to right in a hurry.

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    • Wow!! Borrow fee rate is now 49.78% today. I will never short stocks. Even if you get it right you can still lose.

      Reminder to self: Just say no! No margin, no shorting, no options. Sleep easy.

    • According to the SEC’s order, the Wolfsons engaged in two types of transactions from July 2006 to July 2007 in violation of Regulation SHO. The first type of transaction – a “reverse conversion” or “reversal” – involves selling stock short and simultaneously selling a put option and buying a call option on the stock. The Wolfsons did not locate the stock before the sale, nor did they deliver the shares when sold or make a bona fide purchase of the stock when required to close out their resulting fail-to-deliver position. They were not entitled to the market maker exception to Regulation SHO because the short sales were not made in connection with bona-fide market making activities.

      The SEC's order states that the second type of transaction was a stock and option combination that created the illusion that the party subject to a close-out obligation had satisfied that obligation by buying the same kind and quantity of securities it had sold short. However, the stock was always sold back either the next day or within several days, and the Wolfsons knew or had reason to know that the shares ostensibly purchased in these sham transactions would never be delivered because they were purchased from another naked short seller who did not have the stock either. The Wolfsons entered into a significant number of these sham "reset" transactions with each other and also took the other side of the "reset" trades done by each other as well those done by other market participants.

    • Damn those shorts need to be proved right in a hurry. All my stock is lent out every day now. Maybe I should be worried they have inside knowledge on the results. They are all in now.

 
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