RE: Interesting tweet from aim trader15 Mar 2020 23:47
Readthecandle.
You are wrong, MM s do borrow stock to meet buy orders when they run out of stock themselves. It’s a choice they make and if price falls they buy back cheaper to make a profit and close out the return leg of their borrow. It’s called a covered short.
No point in them selling and not borrowing ie. a naked short, as
1. They would not be able to settle the buy order and collect the cash
2. Their book gets a credit of interest on the assumption trade settles on due settlement date and the MM is receiving the cash from the buyer