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What is naked short selling?

Wednesday, June 2, 2010 | Labels: | |


Germany banned on "naked short selling". Yesterday this news hits in financial world after Germany banned.

In this news one term must be known to investor as well as trader i.e. Naked short selling.

what is naked short selling?

Naked short selling means selling the instrument without owning it. Trader if selling instrument even he dosen't have in account called it naked short selling. In naked short selling trader buy instrument later on low price. In this way trader earn profit.
Naked short selling is highly speculative way of trading. Any goverment can ban on it, to secure investors and for good practice.

Hope reader well understand this financial term. If have any query feel free to write in comment.

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