Phantom Shares

Phantom SharesThere is a large portion of America’s middle class that turns to investments as a means of retirement. A lot of people like to keep tabs on stock they have invested in, or receive as benefits. Some might receive shares of a stock as an incentive to take care of the company they work for insuring they and the company are profitable.

Then one day the moment in the spotlight comes and the company goes public on the market. The glitter quickly fades to gloom as the company you and so many worked so hard for falls in value %15-%35 in the first month continuing the trend over the next year. Someone must be to blame but not who you might think.

Welcome to the realization you have been the target of “naked short sales” of your stock. Small cap companies are at the greatest risk. While there are efforts in place to regulate it, there are still many investors and companies paying the price. To bring you up to speed here is a interesting piece Bloomberg news did on how and why it is happening.

The DTCC, the company behind all wall-street transactions processes $1.4 quadrillion in trades per year and by the way here is what that number looks like $1,400,000,000,000,000! The SEC stated that %1.5 of trades per day are not settled now in small amounts %1.5 might seem like a drop in the bucket but when that much money is changing hands it is a more than substantial sum, $6,000,000,000 in trade do not clear every day. But is that really all that does not clear?

Watch the full documentary now (playlist)

Ratings: 8.30/10 from 23 users.

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6 Comments / User Reviews

  1. denalaza

    Great! This is where the american stock exchangers should aware of. Short selling is an increase tool uses by hedge funds to make money and in between alternative arrangements such as Naked short selling could occur. All the moves are very speculative and almost closer to gambling.

    Remember the fact that stock market is a place created by wealthier individuals to make more money out of middle class people. Trading stocks is not investing but speculating.

  2. CuriosityKilledTheCat

    Wow just wow. No wonder I've always had suspicions about all the money on wall street being fake and just playing with numbers.

  3. Phil Atio

    This explains how financial institutions are able to underwrite massive stocks. Ie. buy 1 million shares. I always found it strange how this was possible to do in a day because back in the 80s when leveraged buy outs where the thing it took a long time as many as 6 months to buy up 51% of a company.

    The thing I don't get is how is naked short selling possible. For example, in normal shorting, you borrow a stock, hope the price goes down and if it does you swap back the cheaper stock, making money. But in naked short, you have no borrowed stock, so when it is time to return the stock you either have to give back nothing, or give the stock and lose your money. One should results in the other guying calling the cops and you going to jail for theft/fraud, the other results in you losing all your investment

  4. David Choi

    Terrible. Put on your critical thinking caps on people. This is probably the worst of the worst I've ever seen. Couldn't even get through the first 10 min. Ask yourself, do you know when you've been mind-manipulated?

  5. Bilbo Baggins

    Can we trust a Bloomberg production to give us the full story regarding a complicated situation shortly BEFORE the global economic collapse?

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