Sales Short Term
Currently a lot are talking about naked short sales, since in recent days the European Commission has approved two projects that establish that the European Union will be responsible for its control.
Start at the beginning, is known as short selling to the operation of selling term securities are not, with the hope of buying them at a time closer to a lower price. That is, the overdraft is the set of forward sales made by speculators who have no title for delivery.
In this sense it is a sale of securities which the seller does not own, but that it intends to purchase for delivery later. There is talk of a short sale overdrawn when the seller has not borrowed the securities, or has not ensured that you can borrow before clearance for short selling.
Specifically, here is where the non-specific risk assessment that is not the transaction. In this case of short selling, and forbidden in Spain and Portugal, the EU regulation are accepted if the investor undertakes to produce traded securities within four days from the closing.
According to the European Commission explained currently there is little reliable information on short selling, making it difficult for market participants and regulators to know what values are being negotiated and global importance.
With this new project is to achieve greater market transparency by requiring that all orders given stock trading centers orders are considered ‘short’ if they involve a short sale, so that regulators know what transactions are shorted.
From the new program, investors will have to report the net short positions in stocks that are meaningful to regulators after a certain threshold (0.2% of the issued share capital), and the market from a threshold high (0.5%).
These measures will mean more information and allow market participants to regulatory authorities control the markets and identify potential risks.
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