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.

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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.

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

 

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