Fat Fingers & Naked Shorts


From Investopedia

“The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.”

The markets are rigged, but is it a bad thing? There was a more innocent time in suppressing prices. In fact as recently as 1999-2002 we saw the attempt at suppressing prices of gold through the sale of U.K. gold reserves. This odd event lacked in fiduciary duty to the general public by the simple fact that it was announced long before the sales took place. Who, in their right mind, would purposely announce their intent to repeatedly dump large amount of anything onto the market.

We have seen a massive continuation of this process through the futures market. Zero Hedge has been a great proponent of this theory and has diligently reported on the subject. Now we see the same occurrence in bitcoin as someone trader has carelessly dumped a massive amount of coins onto the market at a major loss to themselves. Who would do such a thing? Why would someone ever dump bitcoins onto the exchange at a huge loss?

They wouldn’t. This dump was 6,000 coins according to zerohedge.com. It’s public knowledge that approximately 30,000 bitcoins are in the hands of the federal government after being seized.

Are more naked shorts of bitcoins to be expected? Is there an agenda to reducing the value as a currency? Only time will tell. The only thing we can be sure of is that any trader in their right mind would have never sold bitcoins at such a loss without an ulterior motive.

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