Anyone follow heavily shorted stocks? I have a small long position in one that made the threshold list (NFI).A while back a regulation was passed referred to SHO. It is intended to control naked shorting (that's when a stock is shorted without shares being borrowed first). Naked shorting results in failure to deliver the shares.The new regulation defines threshold securities as: any equity security that for which there is an aggregate failure to deliver position for 5 consecutive settlement days of 10,000 shares (or .5%) or more. While on the threshold security list, any failure to deliver that persists for 13 days must immediately be closed out. And, before allowing any additional short transactions to occur, the broker must obtain the borrowed shares, or enter into a an agreement to borrow them.The rule took effect on the 3rd. After close today, the first threshold security list came out (www.nyse.com/threshold). There are quite a few securites listed, including ETFs.There is an additional requirement (not in effect yet) which will require every trade to be labeled as either long or short. This will make it easier to identify “short attacks.”I'm curious to see if this will have any affect on the share price or volatility of those on the list...-Joe
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