Q: Hello to everyone. As a long term investor rather than a short term trader I do not see anything positive about short selling.It seems to cause excess volatility,hedgefunds to blow themselves up, making great trading fees for brokers, etc. I also doubt that all the short sales have the "borrowed" stocks.
My question is "why should short selling be permitted?" After all one cannot sell anything else that one does not own, eg, I cannot sell a car or a parcel of land that I do not own. How can shortselling be good for the stability of the market? If one does not like a stock, sell it. There are also options available if one desires to take a position on a stock that he may not own.
I appreciate your answer and will probably get a lot of flak or be told that I am naive. Thank you.
My question is "why should short selling be permitted?" After all one cannot sell anything else that one does not own, eg, I cannot sell a car or a parcel of land that I do not own. How can shortselling be good for the stability of the market? If one does not like a stock, sell it. There are also options available if one desires to take a position on a stock that he may not own.
I appreciate your answer and will probably get a lot of flak or be told that I am naive. Thank you.