Bill Harts

The primary reasons people get worked up about naked short selling is that they don’t understand it. In fact, if you read the huge sampling of posts, they don't understand enough about the basics of stock trading and short selling to understand what naked shorting really is. I have debunked the theory a number of times just from the perspective of market mechanics and money flow and the Sabby complaint demonstrates why a long term open naked short can't exist perfectly, But it dawned on me that I don't think I mentioned how stocks are held will not allow for a long term unsettled transaction and this fact once again kills the theory. First off, you have never owned any actual "stock." When you buy a stock, what you actually acquire is a legal right called a “securities entitlement.” It isn’t the stock itself—it’s a legal claim against your broker. Your broker doesn't actually own stock, either Your broker also just has a legal claim, another securities entitlement. Its claim is against the DTC and the DTCC/NSCC arms are the sole bodies that keeping track of stock sales and purchases. The overwhelming majority of stocks listed on major U.S. exchanges are held in custody accounts at DTC and exist only as marks in a computer ledger. The stock you "own" is actually owned by the DTC. So what you own is a derivative claim against other participants in the DTC and your broker deals with the NSCC to transfer the money and claims as needed. The last piece of this is that your brokers trades are netted. Meaning after each session, the NSCC nets trades against each other from all brokers and market makers. Let's say Fidelity customers buy 1000 shares of $FNGR and TDA customers sell 900, the NSCC tells the DTC to put Fidelity down for 100 shares. (Google “continuous net settlement” or “CNS.”) So when it comes time for NSCC to settle the netted positions on the third (soon to be one) day after the trade, TDA's stock account at DTC is debited and a credit is issued to Fidelity's stock account at DTC. no physical shares actually are exchanged. And the DTC only keeps track of the net trading of its members—the brokers, rather than individual investors. I could go deep in the weeds here but in basic terms, there is no way that millions or billions of shares exist, there is no possible way to counterfeit shares, the DTC owns the computer, the shares and all of the trades are netted so it would flag instantaneously if there were some sort of large number of unsettled shares floating around. Again, simply not possible to do what they think is being done. The longer this goes on and the more these guys post on this topic, credibility is just drained. It is really hard to show any shred of respect for these people. There will be a day of reckoning, and the excuses can't be the system is against us or the usual bullshit. These fucks just need to admit they were duped or whatever and learn from the mistakes, or simply delete their accounts. If they don't and you do get it, be relentless. Run these fuckers out. They are doing more damage to the reputation of retail traders than anyone in the market. We will never get the respect we deserve with these fucking idiots making noise. It's embarrassing and the HFs, MMs and regulatory bodies are just laughing at retail with this ridiculous bullshit.