Question:

Do hedge funds do the opposite of naked shorts

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Since naked shorting allows more stock to be shorted than actually exists can you do the flipside of that and pressure the stock price upwards, just as easily and with the same amount of money required to short?

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  1. / Hedge Funds don't pressure the stock price up or down.  They ride the wave, and take you with it.

    Let's take the popular oil situation...

    If you go to the pump, and gas prices soar, then your oil hedge fund stocks soar as well, and the money you lost at the pump can be reclaimed in the hedge fund.  If the gas prices drastically drop, then your oil hedge fund drastically drops as well.  

    You are hedging for and against the market.

    One problem for many consumers, is paying higher prices at the pump, but not selling their oil hedge funds when the price is highest.  

    Another problem is when the price of oil goes down, the oil hedge stock goes down, but the price at the pump does not change.

    "Naked shorting is not necessarily a violation of the federal securities laws, and can contribute to market liquidity, but is illegal when it drives down stock prices. In 2004, the Securities and Exchange Commission (SEC) issued "Regulation SHO" seeking to curb abusive naked shorting. ..."


  2. See it this way: suppose you could wheel & deal with no money, making real money if you win, lose nothing if you lose

    Obviously, playing this dangerous game requires you to drive down prices more so than normal shorting based on both facts and actual stock

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