Naked Share Traders Banned?

Generali

kennyboy66 wrote: »

Would you have banned George Soros from short selling Sterling in 1992 ?

Presumably this is a form of naked short selling.

Nope. Soros had to come up with the cash, he had to cover his position.

StevieJ

D!jà vu

Along with QE the eurozone get there in the end

http://www.telegraph.co.uk/finance/comment/3098590/Long-term-disadvantages-of-short-selling-ban-may-outweigh-the-benefits.html

michaels

Something about reading a thread about naked Germans at 10 in the morning has made my stomach turn...

on topic does seem very strange to introduce it unilaterally at such short notice and ideal meat for the conspiracy theorists - after all the German elections are now over so not apparently just a political move.

One thing I would say is that no doubt most European Govts are not shedding tears over the EUR weakening as they have no doubt been looking on enviously at the benefits being accrued from the weak GBP (and to some extent USD)

Generali

There is a theory going around that one of the big German banks ('Landesbanks'???) is about to go bust and rather than prop up Zombie Banks*, the German Government is preparing to let it fail. The ban on short selling is to try to prevent 'contagion'**. I've no idea if it's true BTW, I'm just repeating what I heard.






*Zombie Bank = Bank that has pretty much no ability to lend as it has very little cash which is kept 'solvent' by fudging the definition of solvent.
**A horrible word often used by people who don't know what they're talking about because "That nice man with the decent suits on the telly said so".

JasonLVC

Sterling / Euro - Caxtonfx Currency Update

Sterling lost heavily against a broadly recovering euro yesterday following Germany's decision to ban selling of certain financial instruments.

• Market players said that there was a sense of uncertainty in the markets following the announcement, leading to a wait and see approach about the potential impact of Germany's move.
• In addition there were rumours that the Swiss National Bank has been effectively intervening in the market to lower the value of the franc which aided the general advance of the euro.
• This has prompted speculation that other European authorities may try and stem the recent violent fall in the single currency, though officials have denied that such a move is on the cards.