Tuesday, July 15, 2008

Naked shorting in SGX

Just recently, i just learn this term, naked shorting.

Shorting refers to selling the shares first w/o owning the shares. But one can do naked shorting and covered shorting.

Shorting is disapproved in SGX and one need to cover his/her position by the end of the trading day.(How about other markets?)This practise is naked shorting.

While there is a "non naked" shorting means borrowing shares from brokeages, and paying them back the difference. CFD is the term, contracts for difference. And only certain brokages offer this services.

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