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Message: Shorting

Re: Shorting

posted on Oct 25, 2008 09:26AM

Regular shorting is Ok where the shorter has to borrow actual existing shares and then replace them by buying (at a lower price he hopes - sometimes higher if he loses his bet). It is naked shorting where the naked shorters are selling shares that do not exist that is wrong. A house or broker who facilitates or does this could almost guarantee to make the sp go down (extreme excess of selling) That makes it blatant manipulation and is no longer connected in any way to the merits of a stock. Ban naked shorting but let legitimate shorting continue. It provides liquidity to the market. IMO

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