Failure to deliver

A typical example of a failure to deliver is when a purchaser of a security does not have the cash, or shares as part of a short transaction.

The Securities and Exchange Commission publishes "fails-to-deliver" data regarding transactions in the United States.

[3] Sometimes deliberate fails-to-deliver are used to profit from falling stocks (see Bear market), so that the stock can later be purchased at a lower price, then delivered, e.g. in the week of March 10, 2008, just before the failure of Bear Stearns, the fails-to-deliver increased by 10,800 percent.

[3] According to CNN in the US markets, fails-to-deliver had reached $200 billion a day in September 2011, but no similar data has been available for Europe.

"[5][6][7] A 2016 Journal of Empirical Finance study broader in scope than that by Fotak, et al., found that indeed pricing abnormalities of Russell 3000 stocks with high delivery failures can be attributed to the market distorting effect of the sustained fails.