Who Gets Harmed When You Ban Short Selling? | Metals Mine

  • Who Gets Harmed When You Ban Short Selling?

    From advisorperspectives.com

    Short selling is not evil, and it needs to stay in place if we want to have free markets. Short selling is a wonderful gift to liquidity and efficient price discovery. Markets thrive the more diverse the holders and traders of securities are. It’s what provides efficient pricing and liquidity for all investors. Consider the plight of the mob of Tesla short sellers. In the seven months following the fateful brick through the cybertruck window, Tesla sold 650,000 cybertrucks that hadn’t even been made. The argument that short sellers can capitalize on high-profile bad news is invalid. Elon Musk is sarcastic or ... (full story)

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joyny
Feb 2, 2021 2:13am
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Agree. If you think a stock is overvaluated then must have posibility to short it. Markets are fighting with money. Modern wars. Its ok to make alianses. If cant accept fighting between Bears and Bulls then stay away from trading. If you are confident that social network community is pushing price high with irrational motives or too risky agenda then wait for right time and go short. Will have enermous profits if you are right and price will crash. Why to blame anybody? Its normal market situation. Manipulation is normal. Be smart and calm. Observe market and trade it accordingly.
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LloydOz
Feb 2, 2021 2:42am
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Quoting joyny
Agree. If you think a stock is overvaluated then must have posibility to short it. Markets are fighting with money. Modern wars. Its ok to make alianses. If cant accept fighting between Bears and Bulls then stay away from trading. If you are confident that social network community is pushing price high with irrational motives or too risky agenda then wait for right time and go short. Will have enermous profits if you are right and price will crash. Why to blame anybody? Its normal market situation. Manipulation is normal. Be smart and calm. Observe...
I disagree that manipulation or creating an alliance to do so to do so is OK. That is the very antithesis of a well functioning free market where a multitude of players trade with and against each other in good faith..

That deliberate manipulation takes place to make money is of course well known. and in some countries this is illegal for public policy reasons. What we are seeing is something different - the manipulation by alliance to make other people *lose* money. That is a shift away towards crony capitalism. I don't like that, despite my somewhat initial glee at seeing the Elite get smashed with a feather..

The other thing that is not addressed sufficiently is where there is a finite stock of the underlying asset. I think there used to be something called the uptick rule in America, which prevented more than 100% of a stock being shorted. This was abolished, I dunno, some years ago. I think GME was shorted 130%. I am happy to be corrected, and I am not American so I have no first hand experience of these rules.
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Subdude
Feb 2, 2021 7:17pm
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I didn't even read the article. All I needed to see was this to see the author had done little research (even though I might agree with his main thesis):

Quote
In the seven months following the fateful brick through the cybertruck window, Tesla sold 650,000 cybertrucks that hadn’t even been made

Tesla has sold ZERO cybertrucks. Production does not begin until late 2022, let alone deliveries. Any numbers cited are strictly preorders, which require a $100 refundable deposit.

The preorder numbers are also subject to debate: https://www.electrive.com/2020/08/05...than-expected/

As with everything that comes out of Musk's mouth, you have to have a brick of salt to season it with.
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ilhaner
Feb 2, 2021 6:32am
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Quoting LloydOz
I disagree that manipulation or creating an alliance to do so to do so is OK. That is the very antithesis of a well functioning free market where a multitude of players trade with and against each other in good faith..
And where does selling order flow fit in your free market thesis?
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ilhaner
Feb 2, 2021 6:50am
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Quoting LloydOz
I dunno. Define what you mean by "selling order flow" and I might have an opinion, but otherwise not.
https://markets.businessinsider.com/news/stocks/payment-for-order-flow-robinhood-bill-gurley-trading-app-public-2021-2-1030028631
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LloydOz
Feb 2, 2021 3:12am — Edited
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I could poke a few other holes in Mr Ramsey's ideas. Precisely because I am fundamentally in agreement with his philosophy (I often don't bother much on ideas I don't agree with, its a waste of time, kinda thing).

If you *publish* an opinion, get it right. He doesn't quite get there, and even kicks a couple of own goals which I won't dwell on.

Except, for example, I ask why are conservative pension funds investing in high risk hedge fund grifters which take huge naked short positions and if they are, they have a duty to fully inform their own unit holders of all potential risks. Doesn't make sense to use that factoid in any argument advocating the virtues of the ability to short sell. At best, it is appealing to some high moral ground which is a bit cringe-worthy.
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LloydOz
Feb 2, 2021 6:42am
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Quoting Guest
{quote} When you get profit, someone paid for it. All that social movement was public. Anyone can observe that and make decisions (join or wait and go against). It is not hidden manipulation made by big hedge funds or banks when hidden agreements are made and corruption. That is real manipulation. But here - all visible in public. Can't be even treated as manipulation. Everyone is allowed to say that some stock is good or bad. It is not so that all those folks put money in 1 account and then made deals from that account. All with free will made...
Hello, Guest - Some of the most insidious examples of manipulation/collusion have been quite transparent/open and public, nobody was coerced unduly.

I speak not of fraudulent behaviour. However it may still be unlawful. That is a topic for another forum. Bye, Guest.
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LloydOz
Feb 2, 2021 6:45am
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Quoting ilhaner
{quote} And where does selling order flow fit in your free market thesis?
I dunno. Define what you mean by "selling order flow" and I might have an opinion, but otherwise not.
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LloydOz
Feb 2, 2021 7:16am
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Quoting ilhaner
{quote} https://markets.businessinsider.com/news/stocks/payment-for-order-flow-robinhood-bill-gurley-trading-app-public-2021-2-1030028631
I don't understand your definition.
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LloydOz
Feb 3, 2021 1:22am
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Quoting Subdude
I didn't even read the article. All I needed to see was this to see the author had done little research (even though I might agree with his main thesis)
Thanks for pointing that out.

I find it disagreeable when someone advocates a position that is fundamentally correct, but gets some things so very wrong or just irrelevant. He should have just stopped after the first paragraph and his credibility would be intact.
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Trader#5FAF
Feb 2, 2021 3:03am
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Quoting joyny
Manipulation is normal. Be smart and calm. Observe...
I agree with your post in the main but disagree with your quoted statement, because even from your overall assertions there can be no manipulation given the fixed set of options available to everyone, i.e. the binary buy/sell options. Which button you hit is a choice you make. So yes everyone should work out which is best at any point and accept the consequence. Simple!

The Crow (-_-)
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Trader#FDF3
Feb 2, 2021 4:25am
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Quoting LloydOz
the manipulation by alliance to make other people *lose* money. That is a shift away towards crony capitalism. I don't like that, despite...
When you get profit, someone paid for it.

All that social movement was public. Anyone can observe that and make decisions (join or wait and go against). It is not hidden manipulation made by big hedge funds or banks when hidden agreements are made and corruption. That is real manipulation. But here - all visible in public. Can't be even treated as manipulation. Everyone is allowed to say that some stock is good or bad. It is not so that all those folks put money in 1 account and then made deals from that account. All with free will made deals individually.
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