Questions
Apr
9
2009
Short Selling: Good or Bad?
by bjones54
Overall Rating:
The evidence that short selling has damaged the stock market is circumstantial, but another small set of important questions arises when discussing the merits and demerits of short selling. It is those questions I want you to consider.
1. Is there any long-term market value to short selling the market?
2. Is the idea of borrowing a stock to buy it later at a lower price fair?
3. Should "naked" short selling be banned completely, as it relies on "phantom" stock to achieve its goal.
4. Is the uptick rule helpful or not in curbing excessive short selling in bad times?
5. Are you a short seller with long investments? If so, do you feel you are working against your own interests as short selling drives the overall stock market down?
Tags: strategy-trading
