Short Selling Strategies

1. Traditional Short Sale: Borrow the stock against a fifty percent margin.
This is the only type of short sale that can be squeezed when the share
price moves up because the short seller must add money to their margin

2. A Market Maker Short Sale: U. S. Market Makers are not required to make
physical delivery of stock certificates when they sell it. They are assumed
to be a repository of the company’s shares.

3. A Brokerage House Short Sale: This is a decision not to execute a buy
order from a client,Short Selling Strategies Articles but show the stock as owned by the client on their
monthly brokerage firm account statement.

4. A Clearing House Short Sale: The Clearing House doesn’t execute the buy
order, but credits it to the brokerage firm client’s account.

5. A Naked Short Sale: This is where two brokerage firms agree to trade
stock in a company with neither brokerage firm requesting physical delivery
of the share certificates.

6. An Insider Short Sale: This is when insiders with restricted stock use
it to sell short their company. It’s illegal. It was a common practice when
the Regulation S Hold Period was 40 days.