I have been amazed that until recently there has been almost no understanding of the practise of shorting amongst even the big equity investors and even some brokers.
Thanks for the info fooman but here is a little more info.
1/ Many think that shorting is dead. That is not true. There is nothing stopping anyone who actually owns the stock in any listed company including financials from selling their own holdings and buying them back.
I know that sounds rediculous and obvious but as long as you the vendor have title then you can still short. There are lots of completely legal ways of achieving this outcome. Opes, Tricom and the like buggered it up on a corporate basis but it IS still happening.
2/ The ASX is most concerned (and in fact can only trace) what the NETT position of a broker or a brokers individual clients are at the end of each day when total sales and purchases must balance relative to holdings.
That means that if a friendly broker wants to sell stock they don't have and as long as it is bought back (covered) by the end of the day - then day shorting is fine and almost untraceable.
Such brokerages will be very close with their valued clients and confident of their ability to cover any losses (ie happy with their credit-worthiness.)
Please who think shorting stopped because the rules changed have got their hand well and truly on it. It just changed a bit.
Good luck for those long today. The pre Obama rally is well and truly over.
