Mar. 19, 2023
March 19, 2023 This invites market manipulation by already overly dominant players. With this rule, naked shorts can go into Failure-To-Deliver endlessly. This allows market participants with enough money to just keep lending shares, selling them for cheap, until the price finally is pushed down to where they want it. Companies can easily be cellarboxed this way which endangers a truly free market with actual price discovery and further speeds up the monopolization of capital. The fact that citadel, the most profitable hedgefund in history, actively participated in the design of rule should be worrying. If anything, naked shorting and other ways of risk management should be critically evaluated and restricted to move towards a fair market.