“Shall we play a GAME?
Nothing can STOP what is coming.”
Coincidence?
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The "market makers" got caught with their pants down, I'm pretty sure this doesn't end with tendies for all. There's 2 possibilities:
Right, but they don't have unlimited money. If people really diamond hand it, the price could go to thousands of dollars per share or more. They don't have enough money to buy at those prices. So what can they do? Bankruptcy is all there is.
There might be some regulatory or legislative changes as a result, but who would pay the regular people what they're owed? No one.
Are you paid to do this?
Post-2008 crash, there is a line of succession of debt in place. Primary defaulting hedgefund/bank > dtc > other hedgefunds/banks associated with that dtc.
Furthermore, in the case of a bankruptcy, the market gets paid FIRST. So a short position would require these entities to buy back shares on the open market to close their short positions.
Please don't spread fear and doubt - that is NOT the way.
The DTC is basically a title company for stocks. Buyers deposit cash, sellers deposit securities, and the DTC facilities the exchange.
When a hedgefund does a naked short, and the stock increases in price, the hedgefund is supposed to buy at the new market price to cover their loss. But if the price goes up too much such that they don't have enough money to buy, they "fail to deliver" the shares they sold In the naked short transaction, the buyer deposited money and their broker told them they have their shares, but really it's an IOU. The hedgefund gets more time to deposit the shares to DTC (I think it's 90 days).
If the hedgefund goes bankrupt, they won't be depositing those shares, because they have no money to buy them.
Are you really telling me that the DTC is now on the hook to buy these shares? I doubt it, but I could be wrong. I doubt it because it was the hedgefund who broke the rules in the first place with the naked short. Why would the DTC, the title company, be liable?
In any case, I think this is all hypothetical. Most people don't have the willpower to diamond hand. People are panicky and most will sell when prices fluctuate.