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<p>[QUOTE=&quot;desertgem, post: 1271640, member: 15199&quot;]No one likes the idea of naked short selling, but,</p><p><br /></p><p>Naked short selling is illegal in the US ( except for market makers under certain conditions), but it is not similarly illegal in many foreign markets. Some are more stringent than the US such as the Singapore market which has specified monetary penalties to the transacting party as well as the brokerage. The<b> larger loophole, IMO,</b> is that all of the markets have variable number of days for the stock to be declared as received or failed by brokers. In the&nbsp; US, smaller or more &quot;loose&quot; brokerages can use this time to have participants sell short with no stock to back it up ( naked).<b> In the US it is 13 consecutive trading days</b>. So with the right connections a person can short trade as &quot;naked&quot; for that period of time before the broker has a &quot;fail to&nbsp; deliver&quot; deadline and must close the transaction. With computerized markets , this seems generous. Thus it is very hard to demonstrate naked short selling unless counterfeit stock is delivered , as in Germany a few years back, or as some claim for AIG.[/QUOTE]</p><p><br /></p>

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