Cartoon showing a ‘simplified’ version of how DTCC’s stock borrow program can facilitate/validate naked short selling, and why the new SEC rule doesn’t help the problem.

by TheUltimator5

feel free to sharpshoot the graphics if something isn’t clear. This isn’t easy to understand in any way.

It is hard to depict some things graphically, but I did my best to make this as simple and dumbed down as possible, to allow people to slightly understand the process.

I am sure there are many key elements that are left unanswered, but I tried to get the basic process shown.

EDIT 2: There is a typo in broker 1. When you sell your shares, you don’t sell them with a borrow. Oops