October 14, 2008
Sir,
Please consider putting in place a rule requring that everyone who chooses to sell a stock short do it from a covered position. A covered position being coverted by actual stock or some type of bond equal to the value of the short.
Investors put up their money to buy and hold the stock. How can a business like a loan company be successful if they must constantly defend the stock value against Empty Pocketed Gamblers who hold no actual stock ? The Capital these businesses have to work with should not be endanged by people only wishing to make a quick profit without risking something from the very beginning. That is the main point. The very beginning! A short sellers has nothing demanding that takes commitment of funds to maintain thier business like an actual company does.
So make the playing field level. Demand a bond or cover of actual stock be placed on the table for anyone to qualify to sell stock short.
Thank you, James Wilson