• longhorn617 [any]
    ·
    edit-2
    4 years ago

    Basically, when you naked short sell, you sell stock that you don't actually have. The argument has been made that this is essentially counterfeit stock and that is how they shorted more shares than there are total shares of GameStop. Only market makers are supposed to be able to short sell, but honestly the SEC is a paper tiger and likely wouldn't investigate anyways if non-market makers were doing it. The other side of it would be to argue that you can basically just keep borrowing stock from people who bought it from short sellers and thus it's not counterfeit and just part of how the market works. However, the extent of consent manufacturing and coordinated market manipulation by so many different groups has been making wonder if there is more to the counterfeit stock theory.

    A ladder attack is when hedge funds sell stocks back and forth to each other to lower the price of a stock artificially.

    • kronkfresh [none/use name]
      ·
      4 years ago

      I didnt know there was a word for that, i just assumed it would naturally happen based on my understanding of the Line. So it sounds like basically any "change" that this might bring about is just closing that particular loophole so this can't happen again, and probably killing Robinhood/ retail trading in general

      • longhorn617 [any]
        ·
        4 years ago

        No loopholes are getting closed unless this gets seriously out of the bag for Wall Street, and even then I'm skeptical.