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<p>[QUOTE=&quot;NorthKorea, post: 1296256, member: 29643&quot;]I wasn&#039;t saying that you couldn&#039;t short SLV. I was saying you can&#039;t short it then use the proceeds in the futures market for silver. The reason being, my understanding is that the futures market for precious metals has been effectively eradicated, per HR 4173.</p><p><br /></p><p>FWIW, SLV isn&#039;t an ideal tracker of silver anyway.</p><p><br /></p><p>The inception basket was 50,000 units at NAV. The current NAV represents 48,652.200 units. That means 1,347.80 units were lost since inception due to transaction costs, balance related costs and expenses.</p><p><br /></p><p>So, 6.25% of the shares outstanding are short. That doesn&#039;t seem unreasonable, given the 110/10 long/short method being utilized by most firms for the last six or seven years.</p><p><br /></p><p>Anyway, back to the point:</p><p><br /></p><p>In the example, holder (person B) placed the shares up as collateral in their margin account. In return, the brokerage gave an equivalent amount in cash to leverage their position. Think of this as a line of credit. The moment that the line is accessed, the brokerage is entitled to lend the shares as they see fit. This is your margin agreement.</p><p><br /></p><p>As such, in the example, Person B is well aware that their shares can be lent. This is why brokerages are supposed to give different 1099s for dividends received on shares lent.[/QUOTE]</p><p><br /></p>

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