• @[email protected]
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    11 year ago

    Wait a tick. if I buy 100 shares of Microsoft from a brokerage, the brokerage can still short those shares that I have bought?

    • @[email protected]
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      11 year ago

      Yes! Or more accurately “lend” them to someone who will.

      Even if you have a broker that promises not to there is minimal regulation to stop them and if they get caught the fine is a (small) fraction of the money they make on that transaction (which is just a cost of doing business). I believe this was shown in r/superstonk just by someone looking at the sec filing.

      • @[email protected]
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        11 year ago

        That’s crazy, it feels a lot like the fractional reserve scheme or also when banks can lend the money out and you get a ridiculous interest rate back on the money they’re making off of your money.

        I’m going to look into shorting the stock you buy though, since I don’t know about that one yet. Thanks!