'Naked' Short Selling Gets a Close Eye

'Naked' Short Selling Gets a Close Eye
U.S. officials take measures against stock trading that can be used to force down share prices. Transcript of radio broadcast:
24 July 2008
This is the VOA Special English Economics Report.
The Securities and Exchange Commission in the United States recently moved to protect nineteen major financial stocks. The agency gave an emergency order to restrict what is known as "naked" short selling of those stocks. This is a form of stock trading that is being blamed for sharp drops in the price of some financial stocks.

Short selling is a way to make money when a stock price falls. It involves borrowing shares of stock and then selling them in the hope that the stock will lose value. Later, the shares are purchased back and the loan is settled.

If the stock has lost value, the selling price will be greater than the purchase price. The difference is profit for the investor. If the stock price rises, the investor loses money.

Short selling is considered a necessary part of an efficiently operating market.

With naked short selling, however, trading takes place with shares that have not yet been borrowed -- and may never be. Naked shorting lets traders short sell large amounts of stock that may not be available to borrow in the market. Sometimes, lenders of securities tell several short sellers that they can borrow the same shares.


The chairman of the Securities and Exchange Commission, Christopher Cox, says naked short selling is not out of control. But he says the order was needed as a preventative step to help bring confidence back in financial markets. He says the goal is to stop naked shorting that is done abusively to drive down a stock price.
He said Thursday that the agency wants to extend what he called operational protections throughout the market.

The emergency order went into effect on Monday. The ending date is this coming Tuesday but it could be extended into August.

The American Bankers Association has urged the commission to extend the restrictions to all publicly traded banks. It says protecting only a few big banks will cause short sellers to target smaller ones.

The July fifteenth order covers seventeen international banks as well as the nation's two largest housing finance companies. Fannie Mae and Freddie Mac have lately been the main support for the troubled housing market. But their share prices have fallen sharply this year.

A housing rescue bill on its way to becoming law includes a plan that would let the Treasury invest in Fannie and Freddie if needed. The plan also includes a new regulatory agency with stronger controls over those two companies.

And that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.

----------------------------Google Translate

'裸'卖空得到密切留意
美国官员采取措施，对股票买卖，可用于部队的股票价格下跌。全文电台广播：
2008年7月24日
这是美国之音特别英语经济学报告。
美国证券交易委员会在美国最近提出，以保护19的主要金融类股。该机构发表了紧急命令，限制什么是被称为“裸露”卖空这些股票。这是一种形式的股票买卖是被指责为急剧下降，价格的一些金融类股。

卖空是一种要赚钱，当股票价格下降。它涉及到借款股份的股票，然后出售他们在希望的股票将失去价值。后来，股票购买的背部和贷款解决。

如果股票已失去价值，售价将大于购买价格。不同的是，利润为投资者。如果股票价格上升，投资者失去了金钱。

卖空被认为是一个必要的组成部分有效率地运作市场。

与裸卖空，不过，营运需要的地方，股份尚未借来的-和可能永远不会。赤裸裸的抛空，让贸易商沽空了大量的股票，可能无法使用借贷在市场上。有时候，放款，证券告诉几个空头，他们可以借用相同的股份。


主席，美国证券交易委员会，克里斯托弗考克斯说，担保卖空是不是失去控制。但他说，为了需要，作为一项预防措施，以帮助带来的信心，早在金融市场。他说，目的是为了阻止裸体抛空做到这一点滥用，以推动了股票价格。
他说，周四，该机构希望扩大他所谓的业务保护整个市场。

该紧急命令生效，周一。结束日期，这是未来的周二，但可以延长到8月。

美国银行家协会已敦促该委员会延长的限制，所有公开交易的银行。它说，保护，只有少数大银行会造成短期的卖家，以规模较小的目标。

7月的第十五为了涵盖17国际银行，以及作为国家的两个最大的住房融资公司。 Fannie Mae的和Freddie Mac ，最近一直是主要的支持，为困扰的房屋市场。但他们的股票价格急剧下降，今年。

房屋救援条例草案就其方式成为法律，包括一项计划，这将让库务投资于房利美和Freddie如果需要。该计划还包括一个新的监管机构与更强的管制，这两个公司。

这是该美国之音特别英语经济学的报告，书面，由马里奥里特尔。我史蒂夫ember 。