and a way some ppl lose their houses

[Edited on July 17, 2008 at 10:03 AM. Reason : ]

7/17/2008 10:03:13 AM

Shorting essentually deals with selling shares you don't own, with the promise to buy them back later, used when you expect a stock price to decline.

Lately, shorting has been operating such that you do not to find someone to borrow the stock from in order to sell. With this change, for the companies listed, you have to actually have a entity willing to let you borrow their shares, which are then returned at closing (when you buy).

The net effect is to make it harder to short stocks, which in theory should help prevent an enviroment where short sellers can perform a "run" on a stock, where they collectively drive the prices down.

One of the day traders in the Stock Market thread can probably explain it a bit better.

7/17/2008 10:09:04 AM