Shorting is not bad / not going away

As a 20+ year daytrader I thought I just weigh-in with this fact: shorting is an indispensable tool of the financial markets.

As a 60/40 short biased trader, I’m not saying that for my self-interest. I can, and do, make money both directions each and every day. I’m saying it because this sub (WSB) has (rightly or wrongly) been ascribed an aversion to, and a desire to abolish, the ability to short stocks.

Everyone should be against NAKED short selling. That is an abomination that should absolutely be stomped out – and I also believe it is rampant. Naked short selling makes a mockery of the entire market and I’m proud the apes are finally on the verge of exposing it to the world.

Every time I’ve been asked in my life what shorting a stock means, I’ve gone through the same numerous factors that make shorting possible: and they always include locating shares to borrow, and paying a fee if necessary, to initiate the position. The idea that institutions are filling retail buy orders with shares that don’t even exist really blows my mind and should shake the faith of all market participants.

But retail and institutional investors being able to short stocks they feel are highly overvalued really does serve to prevent the pervasive & consistent mis-pricing of assets. This prevents small groups of persons/entities from ‘cornering the market’ on numerous low float illiquid stocks (and others). And of course there’s the liquidity argument. And on and on blah blah.


submitted by /u/dimitriG4321
[link] [comments]

Jump To The Original Source

Share this Story
Load More Related Articles
Load More In Stock News

Facebook Comments

Check Also

Stop smelling flowers, start eating them: Cooking with flower power

Published by DPA When dandelions start to bloom, ...