top | item 33968186

(no title)

tdees40 | 3 years ago

I work in markets. No, you cannot just fail to deliver. I'm also not sure how the ETF thing would work. If it's 1% of the ETF you're going to hedge out the position using a giant notional. It doesn't work.

discuss

ferdek|3 years ago

Official SEC document regarding regulation SHO describes both illegal and legal cases when you can "just" fail to deliver [0]. Market makers which also happen to have hedge-fund branches are having the most flexibility in this.

[0] https://www.sec.gov/investor/pubs/regsho.htm

tdees40|3 years ago

So it may not be illegal in all cases (although it is in many cases), but how does failing to deliver close out a short position?