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Sep19-08, 09:47 AM
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Quote Quote by jimmysnyder View Post
I didn't see anything about covering in the article. As I understand it, there is no requirement to cover existing shorts, just a prohibition against opening new short positions. Am I wrong about that?
No requirement to cover positions but financial suicide if you don't; as with the downward pressure relieved, stocks will rise, leading to losses and the danger of shorting stocks is your losses are limitless. At the moment for example Morgan Stanley are up 25% and Goldman Sachs up 18%: not so good for someone betting on the stock price falling.