|
Post by mnholdem on Nov 13, 2015 10:46:20 GMT -5
I think the TASE site confirms that ETFs may be parties to a short sale:
----
Short Selling Short selling is the sale of a security that is not owned by the seller. The seller must borrow the securities to be sold from another entity. Short selling contributes to the liquidity in the market.
Equities, Index Linked Notes (ILN) bonds, and T-bills can be sold short on the TASE. Short selling is a “reverse investment” transaction, in that selling precedes buying. In a short sale, the investor profits when the price of the security declines, and loses when the price rises.
Parties to a Short Sale
The parties involved in a short sale are the borrower, the lender and usually, a TASE member mediates between them:
· Lender – the owner of a security who is willing to lend it to someone else. The main lenders are institutional investors – provident funds, insurance companies, mutual funds and ETF issuers.
· Borrower – borrows the security in order to sell it short.
· TASE member – mediates between the lender and the borrower.
---
According to the TASE website, equities may be shorted and ETF issuers may be lenders to those parties who are shorting equities.
Source: www.tase.co.il/Eng/TradingandClearing/Trading/Short%20Sale/Pages/ShortSale.aspx
|
|
|
Post by mnkdfann on Nov 13, 2015 10:50:23 GMT -5
mnkdfann and anderson, I'm not certain you can equate the TASE "ETFs" with, say, iShares ETFs. The TASE "ETFs" are actually exchange indices, and they thereby serve a different purpose than ETFs. Indices are passive instruments. You may buy/lend against the index via an ETF, but the index itself is a weighted expression of the components. In fact, on TASE, there are specific TASE index baskets that are available for shorting, but they are baskets of the all stocks in that index. In other words, the Index may be shorted, but the index itself is passive. That's not to say that participants in the TASE cannot short MNKD...they can. And those participants may be the "buyers" for stocks for the indices, but the MNKD shares held within the indices are not traded, except upon rebalancing. Exchange indices still can and do lend out shares. The shares are not SOLD outright unless / until the ETF is rebalanced, but its constituent shares can be loaned out. By lending shares out, an index ETF can actually obtain tighter index tracking (e.g. it can lend shares out in order to better track an index between monthly or quarterly rebalancings.)
|
|