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Shorting stocks
Posted on 11/22/24 at 11:12 am
Posted on 11/22/24 at 11:12 am
Can someone explain to me what would happen if shorting stocks were banned? Or are we in a situation where shorting stocks is a necessary evil.
2
Posted on 11/22/24 at 11:21 am to Teauxler
What is evil about it? It’s just like any other stock market strategy. You expect it to go up, you buy and then sell. You expect it to go down, you sell and then buy.
Posted on 11/22/24 at 11:43 am to Teauxler
quote:
Can someone explain to me what would happen if shorting stocks were banned?
Liquidly would dry up. In many stocks market makers will short stocks in the normal course of business to fill buy orders.
Posted on 11/22/24 at 11:54 am to Gaggle
quote:
What is evil about it?
I don't know about evil per se, but it seems like a heavy market manipulation tool for large traders. I'm not advocating for it to go away. Just speaking my personal opinion, but it provides an avenue for the big dogs to make money that retail traders can't compete with. Then you get a scenario where the retail traders try to stick it to the large firms like GME and trading platforms, through the help of institutional traders again find a way to put their thumb on the scale in their favor again.
In my perfect world, the company's stock would be driven based on the company's performance and nothing else. When a company's stock gets shorted, a lot of times, it is not due to the company's performance.
Posted on 11/22/24 at 2:30 pm to WhiskeyThrottle
quote:and if performance is poor, the stock goes down, you don’t own it so you can’t sell, it should be off limits to trading? That doesn’t make any sense.
In my perfect world, the company's stock would be driven based on the company's performance and nothing else.
shorts and longs do the same thing. An unethical short position is no different from an unethical long position and there are more than plenty of those.
finally, no retail small investors should ever ever borrow shares to sell short. If you want to go short sell calls on the shares you own or buy puts. Or use the daily short ETFs
Posted on 11/25/24 at 8:23 am to cgrand
Agreed. And good to see you back. 
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