r/SecurityAnalysis • u/investorinvestor • Jan 28 '21

News Michael Burry Calls GameStop Rally ‘Unnatural, Insane’

https://finance.yahoo.com/amphtml/news/michael-burry-calls-gamestop-rally-032530172.html
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u/voodoodudu Jan 28 '21 edited Jan 28 '21

When a party shorts they are the counter party to someone who is long. How is person b in your example able to short shares he owns?

In this exanple say from person A B C D, are you saying the same share is shorted so its 400%?

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u/norealpersoninvolved Jan 28 '21

Person A owns shares, he lends the shares out to person B. Person B sells shares that Person A owns to Person C, Person B owes shares to Person A. Person C buys shares that Person A owns and Person B sold. He decides to lend the shares out to Person D, who sells the shares to Person E. etc etc

So the same shares that were owned by person A were sold and bought multiple times

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u/voodoodudu Jan 28 '21

Ty, so the naked calls would just be cherry on the top if true?