I’ve been reading about Naked Short Selling, following Germany’s decision this week to ban it. What the financial world gets up to is rather interesting, to say the least. For those who don’t wish to read about it themselves, my summary is this: Short-selling is where you borrow something, then sell it, buy it back later at a lower price (you hope) and return it to its owner, and you pocket the difference; Naked Short Selling is when you are so keen you sell something before you’ve even borrowed it.
Hmm. Short selling kind of reminds me of what electrons can do in Quantum Electrodynamics (QED). They can ‘borrow’ energy, for a short time, use it (e.g. for creating electron/positron pairs), so long as they give it back again later. I’m not sure whether there is an equivalent to the naked version – i.e. using the energy before they’ve borrowed it. It all gets rather complicated, which is why I steer well clear of QED.
Why leave it at Naked Short Selling? Physicists seem to be big players in the financial world. Why not a few articles on why?
Todays Sunday Times has an excellent article on the back page of the business section how poker is the new hiring tool for traders in NY. Note the wee mention of “buying or selling a split second before their rivals”. Who would have thought that National Time Standards would be used for THAT!!!