GDP and jobless claims data to hopes of a rosier economy ahead and welcomed restrictions on the social media-driven trading frenzy. Online trading platforms Robinhood and Interactive Brokers restricted trading in shares of GameStop, BlackBerry and other companies that saw hefty gains this week after they were targeted by an army of retail buyers. The main Wall Street indexes on Wednesday registered their sharpest declines in three months after a squeeze on hedge funds holding short positions in the social-media darlings. MSCI's benchmark for global equity markets rose 0.
Overstock to Release Blockchain Product to Curb Naked Short Sales - CoinDesk
There is a massive threat to our capital markets, the free market in general, and fair dealings overall. Hordes of new retail investors are banding together to take on Wall Street. They are not willing to sit back and watch naked short sellers, funded by big banks, manipulate stocks, harm companies, and fleece shareholders. The battle that launched this week over GameStop between retail investors and Wall Street-backed naked short sellers is the beginning of a war that could change everything. Make no mistake about the enormity of this threat: Both foreign and domestic schemers have attacked Canada in an effort to bring down the stock prices of its publicly listed companies. In Canada alone, hundreds of billions of dollars have been vaporized from pension funds and regular, everyday Canadians because of this, according to Texas-based lawyer James W. In order to [legally] sell a stock short, traders must first locate and secure a borrow against the shares they intend to sell.
The steep learning curve intimidates traders and investors, leading them to avoid it entirely, even in bear markets. But this classic strategy can be profitable through uptrends and downtrends as long as strict risk management rules are followed and timing is carefully managed. This reality check tells us that long term profitability requires more just than throwing money at a falling security. Short sale mastery needs simple entry strategies, perfect timing and defensive trade management. Sellers also need to adopt rules that enhance these strategies while lowering the risk of getting caught in a short squeeze.