What is a short kit?
Shortly Kiting is an investment strategy that allows naked short retailers to successfully complete a short sale, even if they have not worked out that they can borrow shares in advance. The real short film process is done by moving the position from one broker or seller to another. This allows a naked short retailer to the next time to successfully lend shares needed to complete the process.
Because short kitchen is so closely linked to naked short sales, it is important to understand what is happening when the investor decides to engage in this type of investment strategy. The short short sales process includes the sale of the short short shares. Unlike short sales, where the seller verified the availability of shares for business activities, naked short sales include shares where the trader did not verify that the stocks are actually available. If the investor is unable to obtain shares in timely Mannuer, often three market days, the state of sale is known as non -delivery.
In order to deal with a short sale, where the investor realizes that the necessary stocks cannot be borrowed, the use of a short numerical helps buy the next time. The investor sets further short sales through a different mediation and uses the proceeds to cover the initial short sales. Meanwhile, the investor is able to borrow the necessary shares to complete the position created with the short kit strategy and the result is favorable to all parties in question.
For many years it was possible to use short kit only if the securities used for short sales are currently enjoying the upward movement of the price. This approach effectively eliminated the chance for investors to attempt a dragon and use stocks that were either stagnant or dropped per unit. Although it is now possible to use this approach on several markets around the world regardless of current securities statusSearch using securities that are on an increase rather than show small or not growth.
Given the complexity of the establishment of the short -term air conditioning procedure, it is often a good idea to participate in this type of activity only if the investor knows the market well and has a lot of experience with the investment process.