Why Is Short Selling Legal?

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When a stock rises, all of its investors turn a profit, right? That’s not the case for short-sellers, who look for profit by betting against the success of a company or the market. The recent events surrounding Tesla, Reddit, Robinhood and Gamestop’s short squeeze have put short selling under the limelight. So how did the practice of betting against the U.S. market become such a common, legal practice? Watch the video to find out.
The recent events surrounding meme stocks and GameStop’s short squeeze have put short selling, one of the oldest practices in the stock market, directly under the limelight.
“Short selling has always existed,” said Ihor Dusaniwsky, managing director at S3 Partners, a firm that specializes in analyzing short selling data. “It’s been a part of the normal trading process on the exchanges since exchanges started. We’ve seen short selling increase recently in a broader spectrum of names.”
Short selling has always been a controversial practice, often blamed for causing drops in the market. The Securities and Exchange Commission eventually stepped in to better regulate short sales after short sellers were once again blamed for a market decline in 1937.
“I think the main reason people dislike short selling is that something just feels bad about profiting from someone else’s failures,” said Sasha Indarte, an assistant professor of finance at the University of Pennsylvania’s Wharton School. “Short sellers gain when someone else loses. It’s like if you took out an insurance policy against your neighbor’s home and your neighbor’s home was destroyed.”
Short selling is when investors, mostly professionals like hedge fund managers, borrow shares of a stock from a broker and sell them in the hope of buying them back cheaper. If the stock drops, the investors make a profit off the difference when they return the shares to the broker. A short squeeze occurs if the price goes up, and the investors need to rush to buy the stock to cut their losses.
Countries in Asia and Europe have banned short selling during times of economic uncertainty. Some studies, however, have shown that a ban on short selling actually does more harm to the market than good.
“During the financial crisis between 2007 and 2009, regulators have actually banned short selling temporarily in response to the large drops in the stock market. Regulators have since expressed that they regretted this policy action,” Indarte said.
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Why Is Short Selling Legal?

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31 окт 2024

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Комментарии : 839

@BlackSpaniard 3 года назад

Short selling isn't the issue!!! We traders aren't against shorting. But when the big players short 140% of a stock then Robinhood bans buying... Well then that's the issue

@geraldanderson7939 3 года назад

short selling is still predatory but it is definitely worse when the big guy is doing it

@geraldanderson7939 3 года назад

@N Ch why is shorting not evil? it literally incentivizes the degradation of business.

@leonleon2021 3 года назад

Welcome to the "Free markets" where markets are never been FREE!

@BlackSpaniard 3 года назад

@@geraldanderson7939 there needs to be a balance in the market. Otherwise how can you bet and make money against a company that's doing bad?

@julius5256 3 года назад

I honestly don’t get all the negative stuff about short selling. It’s part of the market, part of the game Can someone please explain to me what’s the problem

@Vlican 3 года назад

as already mentioned, short selling is fine... it's brokerages that stop the buying during a squeeze to protect their hedge funds, that's illegal.

@unwound9343 3 года назад

Which hedge fund are you talking about?

@DJ_Force 3 года назад

Why should anyone buy if it's not going to make them money?

@Mountain4 3 года назад

@Hakim Habib lmao did your check from Melvin capital come in?

@unwound9343 3 года назад

@@Mountain4 Melvin Capital closed their positions days before RH blocked trading..

@polskiewinnipeg 3 года назад

@Hakim Habib the froze buying yesturday again and the stock at 3:45 Central time its all hedge funds 2 almost when belly up and got bail outs cause they had to pay up on the shorts.

@graham1034 3 года назад

I'm totally fine with short selling. The issue I have is around how when some of the larger funds are going to lose, the system works to prevent that from happening. If a large hedge fund is going to lose billions because smaller players are buying a stock driving up the price, the big guy shouldn't be protected by the system. You can bet that if I short a stock that goes up a ton there is no way that Robinhood, etc are going to protect me. As always, the rich get richer. But here (and the 2008 bailouts) we see that when there is a chance that the rich could not get richer the system (and by extension all of us) prevents it from happening.

@johnb8319 3 года назад

Lets not forget AIG was benefited 100% for bailout leading to billions of profit for Goldman during 2008. They were asking ppl to buy subprime and was betting against it atst

@graham1034 3 года назад

@@johnb8319 still makes me mad thinking about it. Even the traders that lost their jobs still had years of big bonuses beforehand and didn't lose a cent.

@ihl0700677525 3 года назад

Yep. In short we're against market manipulation, not against the "short selling" itself.

@aidenw207 3 года назад

It's a big club and you're not part of it. They got the media & big tech in their back pocket .

@JewTube001 3 года назад

actually they could protect you, but that would come in the form of limiting the ways in that retail investors can trade.

@101theobserver 3 года назад

We are not against short sellers ..what we don’t like is when big hedge funds tell banks to raise price targets then short sell right after that ..it’s a dirty game full of fraud.

@ihl0700677525 3 года назад

Yep. In short we're against market manipulation, not against the "short selling" itself.

@won1853 3 года назад

Who's "we"? There are certainly a lot of people who are against short selling itself and you don't represent all of them lol

@ihl0700677525 3 года назад

@@won1853 "We" includes the commenter (Zigzag), myself, and pretty much everyone interviewed in the video above. I understand people like Elon Musk equates short selling with "profiting from the failure of other people", which indeed sounds despicable and "immoral". However, short selling also provide the market with checks and balances. IMO the benefit *far outweighs* the potential harm, and those short sellers who make wrong prediction (e.g. those who short sell TSLA) definitely pay for their mistake (as they should). Only when they try to *manipulate* the market by abusing and breaking the rules, that it become outright harmful and should be illegal.

@omgcyanide4642 3 года назад

@@rylandreed6231 both of your channels are 1 month old, SCAMMER!!!

@markhathaway9456 3 года назад

Sorry, I don't follow the markets closely. Could you explain the part about "banks raising price targets" and how that's related to "short sell right after that"?

@stbhansen 3 года назад

Short selling is legal so hedge funds can control prices and play the market both ways... its a racket...

@vernethall2276 3 года назад

If you think so you clearly have no knowledge about shorting or investing.

@collinsterry8020 3 года назад

The stock market is one of the most potential places to invest your money, investing in stock is often risky which draws attention to the huge losses and gains of investors. If you can manage the risk then you can take advantage of the stock market to secure your financial position and earn money

@gebiaaron3344 3 года назад

The stock market is riddled with uncertainty and investors tend to overlook the importance of getting a skilled entity which will serve as guidance against huge risk and that gives room to unforeseen losses

@jacksondougan476 3 года назад

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@EmersonSalmeron 3 года назад

The issue isn’t shorting, the issue is companies like robinhood protecting their friends in Wall Street.

@dubd7626 3 года назад

Yeah you’re right

@mariuswong8449 3 года назад

The bigger problem is that robinhood previously alleged them as some kinda “robinhood” guy, for the people.

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@duyduhh3798 3 года назад

Funny you can't see a scenario where Wall Street friends were pumping and dumping. You're new to stocks?

@pontiusglaw6394 3 года назад

Funny that this is only an issue now that the common man is making money

@steveg6978 3 года назад

The real issue never ever gets covered ever....NAKED SHORTING !!!!!!

@Cassp0nk 3 года назад

That’s because it’s illegal and doesn’t happen.

@trapsarentgay4195 3 года назад

@@Cassp0nk ever

@Bash70 3 года назад

@@Cassp0nk Right, that's why GME was shorted 140%

@Cassp0nk 3 года назад

@@Bash70 they aren’t naked, it’s just that stock can be re-lent as someone buying it doesn’t know the stock they hold was lent already.

@Bash70 3 года назад

@@Cassp0nk GME share price fell to as low as $2. There's no logical way that could've happened without naked shorting going on.

@joshuajoe1419 3 года назад

The problem isn’t short-selling, it’s short-selling a 140% of a stock.

@Justforthefifteen 3 года назад

Why is that a problem? Just cause you don’t like it?

@spacenodus7959 3 года назад

@@Justforthefifteen how can you buy something that doesn't exist ?

@Justforthefifteen 3 года назад

@@spacenodus7959 the entire premise of short selling of even the stock market is to bet on events that don’t exist or haven’t happened yet. So?

@spacenodus7959 3 года назад

@@Justforthefifteen no , search naked shorting and you will see

@spacenodus7959 3 года назад

@@Justforthefifteen in the stock market you buy and sell shares that the company has created and thus exists

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@timw4369 3 года назад

its legal because it supposedly keeps markets liquid. Its actually betting and nothing more then that. Sad but it is nice to see the short sellers get hammered and be wrong

@hofniamwaalwa3724 3 года назад

*All investments/trading is betting on future prices.

@seneca983 3 года назад

"its legal because it supposedly keeps markets liquid. Its actually betting and nothing more then that." These two things aren't contradictory.

@markhathaway9456 3 года назад

Why are they allowed to short more stock shares than exist? Doesn't that distort things?

@alansmith888 3 года назад

Short selling isn't the issue. NAKED short selling by these institutions is the issue.

@michaelpatrick6984 2 года назад

I hope short selling becomes illegal. I don't want anyone to have the ability to make money when the market goes down because I don't want anyone to have an incentive to lower stock prices. I don't trust big players to play fairly. It hurts investors and the entire economy. If the big players make plenty of money in a crash there will be no reason for them not to coordinate and send stocks lower. Good luck enforcing ethical rules on some of the richest people on the planet. We need to make it in everyone's interest for stocks to appreciate or we can all enjoy clawing our way to the bottom.

@McRyach 3 года назад

CNBC didn't cover unethical practice of short sellers such as CITRON, who after shorting a stock go on TV and claim that the company in a terrible financial condition, there is no way it will ever make money, and you'll be lucky to SELL NOW. If not covered the bad practice seems non existent in this report.

@robertguidry2168 3 года назад

I totally agree, it is unethical to manipulate the market by lying. However short selling is important because of keeping stocks more grounded in reality, looking at the fundamentals of the companies to see if they are actually set up to succeed or not so much

@MrClaudiuzz9 3 года назад

You can say the same thing for investors and pundits who hype up companies on TV claiming they will make all your wildest dreams come true. It’s the game. Think for yourself.

@clintonhilary7736 3 года назад

@P4LJoe 3 года назад

I like how big companies are allowed to do this and dump on us but when the little guy gets one over on you. Now it should be illegal.

@woodrowwant6216 3 года назад

You can short sell

@DDLeeroy 3 года назад

"giving false or inaccurate hits of information, that's what is wrong with long or short selling..." -says CNBC

@SDZ675 3 года назад

The liquidity argument for short selling is absolute BS. If there's no shares to buy at a lower price, you just buy at a higher price. That's actual supply and demand.

@az-wr1lb 3 года назад

The fact Mr roaring kitty had to defend his actions despite purchasing stock in a freemarket proves there is a fundamental problem with short selling. If short sellers are happy losing billions when shorts go wrong then there is no problem

@susza89 3 года назад

"It's OK when we do it" - rich people

@axel_foley69 3 года назад

No one is stopping you from shorting stocks, absolutely nothing stops the average investor from shorting

@susza89 3 года назад

@@axel_foley69 and the game stop drama is a perfect example of that...

@axel_foley69 3 года назад

@@susza89 actually is you understood what's really going on, the Wall Street bets guys are not shorting a stock. WSB are longing shares whereas sophisticated investors are shorting... you're taking to a finance major by the way

@muhammedkeser7064 3 года назад

@@axel_foley69 well you don't know your major much then. Short selling is ok if you are expecting a company to have bad news/statements etc.. Manipulation and then short selling is not ok which is whats happening with the 'big' boys. Gamestock is a good example, you should learn more about it. The issues are not only 140% short selling, there are bigger issues with it. Dig deeper.

@axel_foley69 3 года назад

@@muhammedkeser7064 i never said manipulation was okay. Your thought process is so scattered you're conjuring up weird stuff in your head. I said anyone can short stocks, i never said manipulation is okay.

@philandeswilliams1975 3 года назад

short sellers can help keep the market and companies honest; as long as they are transparent and not deliberately sabotaging stock prices for quick gains.

@zonghaoli4496 3 года назад

Speaking the truth, they help finding the prices.

@rosaliemiller3183 3 года назад

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@markhathaway9456 3 года назад

@@zonghaoli4496 How do you know they're not just manipulating the stock price?

@gentlemandemon 3 года назад

The biggest issue I have with shorting is that you can have people short more stock than actually exists. Sure, it creates liquidity, but it's doing it with assets that don't actually exist. That's just asking for exploitation from all sides

@zachb1706 3 года назад

That’s not shorting

@gentlemandemon 3 года назад

@@zachb1706 They literally shorted 140% of the existing stock, did you not watch the video?

@zachb1706 3 года назад

@@gentlemandemon that’s naked shorting, which is illegal. Legal shorting is a great practice

@gentlemandemon 3 года назад

@@zachb1706 Ok? Then the regulatory body in charge of this by overlooking what turns out to be an actual crime as it was happening

@tropicalsbigdaddyr53577 3 года назад

Only illegal when it’s regular people doing it

@rosaliemiller3183 3 года назад

@MoonLiteNite 3 года назад

I do it all the time... not illegal

@tropicalsbigdaddyr53577 3 года назад

@@MoonLiteNite that’s my point...

@tropicalsbigdaddyr53577 3 года назад

@@MoonLiteNite they’re saying it’s unfair cause it’s not the rich doing it

@SérgioGuerreiroHenriques 10 месяцев назад

NBC: "Here's why short selling is legal. We need to be able to place bets on when someone dies"

@evanfernandez272 3 года назад

There is something called calculated risk and stop loss. So why is shorting an issue. Bruv. The main issue here should be why fund are trading naked.

@whis5448 2 года назад

Short sellers in stock market = gamblers in casino.

@FinancialShinanigan 3 года назад

Shorting isn't the issue, hedge funds selfish use of shortselling is

@clintonhilary7736 3 года назад

@Arjay404 3 года назад

I don't think there is anything wrong with betting on a company doing poorly, having too many people bet against a company could incentive the company to get their act together and fix things or it could help to put the real value on a overpriced company.. The real issue I see is being able to bet against a company using something that you don't own, that's just bizarre.

@JewTube001 3 года назад

they own it temporarily, that's all borrowing really is anyway.

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@sang3Eta 3 года назад

When paper stocks converted to online nominee accounts the ownership of the stock was stolen from the buyer to the dealer. It should be illegal to make money renting and selling someone elses asset to scare them into selling it at a lower price! Imagine if they did this with your other assets like your house or your car, you would rightly call them thiefs and fraudsters!

@johndalton1329 3 года назад

Hahaha

@tyjonesd 3 года назад

If you don't like the stock just liquidate your OWN shares or simply don't buy it. Intentionally driving the price down is manipulation, worse with shares you don't own.

@markhathaway9456 3 года назад

How much selling has to occur to drive down the price? Could some kind of limit on short selling be based on $ value or number of shares or percentage of outstanding shares without damaging the system and the utility of shorting?

@gidd 3 года назад

When it's the funds and billionaires making money by exploiting the ordinary investor it's ok but when the investor does it and exploits the rich people start questioning whether it's illegal .The hypocrisy 🤦🏽‍♂️

@calamorta 3 года назад

Many people with no market knowledge started proposing the ban of short selling... This is why videos like this are important.

@ahmedahm1 2 года назад

Short selling sounds unethical. You should should gain money by making a beneficial service or product !

@zachb1706 2 года назад

Then you don’t understand anything about investing. It’s way more complicated than funding a “beneficial service”. It’s not unethical. If you spot a bad business with bad fundaments, why shouldn’t you be able to profit?

@ahmedahm1 2 года назад

@@zachb1706 actually I do. Investing is buying and selling and should be done in a responsible way unlike in the gambling casinos 🎰

@zachb1706 2 года назад

@@ahmedahm1 I don’t think you do, if you did you’d have no problem with shorting a stock. It’s just one of dozens of mechanisms that is apart if modern investing, and it is an important part of the stock market.

@deepaksandid4119 2 года назад

Selling what you dont own...that's the issue - causing stop lose to trigger not because the company resources /project/pipeline etc is not at the rendez vous- but because cartels are allowed

@zachb1706 2 года назад

They are selling what they borrowed. It only causes the stock price to fall if there is an overall negative outlook for the company

@deepaksandid4119 2 года назад

@@zachb1706 have you ever sold anything you borrowed in your whole life ? it is not YOURS...thats the concept,,,can you sell (opposite of buy) before you buy.....you can;t control what you don;t own. Thats the concept/rule...in stock they wanted to manipulate the market to create fake supply...and this is how the exception to the concept started to be legal

@olbradley 3 года назад

Answer: Because it's another way to make money, why did you think? If something is going to go down you have the ability to make money from it. And it's not like short selling is immoral they're going to go down anyway and short sellers often see things other's don't, they have they're own place in the market like everyone else.

@jackcullen69 3 года назад

When big players profit and lose: Ok When too many small players lose: Ok When too many small players profit: NOW HOLD ON THERE

@Kirito14682 3 года назад

Shorting hasn't been an issue until Wallstreet traders lost.

@tarrantcountykid 3 года назад

Short selling today is of no useful purpose for anything other than stealing value from unsuspecting investors. Whatever a hedge fund manager thinks about a stock his opinion is his for buying and selling his own stock.

@zachb1706 2 года назад

You don’t understand a thing about the stock market

@tarrantcountykid 2 года назад

@@zachb1706 I understand everything about the stock market, what it originally intended to be and how and what it has become. I understand how some people make money and how some people lose money. I don’t have to like it just because others do.

@jojo_COL_23 3 года назад

I like how they saw the rule was eleminated right before the 2008 crash. What a coincidence......

@timothydonnell5399 3 года назад

Nope. Your borrowing someone's stocks to drop the price, thus stealing profit from the original owner. All of this with no up front money. The market should be for investing into businesses, not gambling against them.

@dmitrozarickiy4289 3 года назад

Gamestop stock was shortened 120% !!! It has nothing to do with "...providing liquidity to the market.." It was purely an attempt to move price down from few powerful hedge funds.

@al1383 3 года назад

The borrowing of shares, ESPECIALLY when you can borrow more shares than should be available, and selling them below asking price in order to drop a stock price is a very easy way to drop a sp. That combined with services always try to get the best available price when stocks are purchased, makes tanking a stock price way to easy. I hate it, but idk what the answer is

@TheDanaYiShow 3 года назад

I think there are a lot of valid points and definitely educates a lot about what short-selling is, but personally I think the issue is when short-sellers are able to short more than 100% of the available float, which can exacerbate short squeezes as those who are short rush to cover, but can't because there aren't even enough shares to cover!

@Information_Seeker 3 года назад

2:20 "the ONLY way to make money off that is to short the stock" so puts suddenly don't exist now?

@barry5767 3 года назад

Puts are considered a form of shorting.

@AnotherDayattheDock 3 года назад

@@barry5767 except you only lose what you put in

@ChristopherHalbersma 3 года назад

@@barry5767 Puts aren't the se as shorting through. You own the shares you sell a put option on (generally).

@云梦丁氏 3 года назад

Question should be: should short be public and transparent?

@keybraker 3 года назад

The stock exchange is fundamentally broken in need of an overhaul to bring it up to speed for the digital age.

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@tophatv2902 3 года назад

BOT ALERT

@mewmewkissycutie1028 3 года назад

thought short sellers were people who were short and sold stuff

@tomlxyz 3 года назад

@gg gg this is a comment section, not an Q&A section. People post without being asked

@danevosler 3 года назад

Ban short selling. It adds no value.

@calvincoolidge3406 3 года назад

Back when I was President of the United States of America, There was a crash in the Stock Market in 1929

@siddoo6778 3 года назад

@gg gg @Sidd oo bro you make me made stop being a copecat b***

@bsktballman08 3 года назад

I’m only a couple minutes in to the video but did they completely just gloss over the fact that this is a zero sum game? When someone sells a stock short and makes money off it, someone else sold them that short and lost the same amount of money.

@zachb1706 3 года назад

The buyer is betting on it increasing in value. In the end, the market sees 7-8% annual gains - it’s not a zero sum game

@markhathaway9456 3 года назад

@@zachb1706 Have companies been driven into bankruptcy by shorting?

@beemilli9777 3 года назад

How can you sell something you don't own? And the liquidity in the market is based on the shares issued, your bet should not create fake shares that will be sold. This is how the market goes down, and the retail investors and WSB will be blamed for it.

@zachb1706 3 года назад

That’s not shorting

@beemilli9777 3 года назад

@@zachb1706 You're right, it's called naked shorting.

@ALIANZASTAR 3 года назад

Short selling goes like this: 1 - You borrow a stock that costs a 100$ and automatically sell it at that price. 2 - You have 100$ now in your pocket ,and also owe someone that stock even if you sold it. 3 - You wait a week for example, and now the stock is worth 50$ 3 - The person who bought the stock from you now has to sell it back to you for 50$ (he is contractually obligated to sell it back) 4 - You use 50$ of the 100 you got from selling the stock, meaning that you now have 50$ and the you got the stock back. 5 - You return the stock to the person or broker your borrowers that stock from, and you get to keep those 50$. 7 - Congratulations: You have won 50$ with a stock that wasn’t even yours to begin with by secretly selling it and buying it back a week later. So it’s like: You sell a borrowed stock at a high price, and buy it back at a lower price to be able to return the stock back and keep the difference. The 100$ you got at first were nice and all but since it’s not “your stock”, you cannot really just sell it and forget about it you have to buy it back in order to give it back to the true owner. How can you sell something you don’t own? Because the owner is giving you permission to do it by accepting the terms in the broker platform they use and they are also probably earning an interest

@amolborgaonkar501 3 года назад

Well well well, when it’s pinching them, they Q whether shorting should exist in the first place. Nice. Until now when they were making profits, yeah shorting is cool.

@MontananMusician 2 года назад

So the trick is to double down on your choices. Really try and screw the other company.. Seems kinda narcissistic imo

@The76Malibu 3 года назад

The issue is en-masse short selling. When Gamestop is shorted 140% that means the short selling itself is affecting the company. Gamestop's stock was falling because everyone was selling and noone was buying. Nothing they did and the company is being driven into the ground.

@Greatkohaku 3 года назад

Shorting is fine and provides a good balance to the overall market. The problem, which this video does not cover are that of predatory shorting where an organization will take a large short position on a company, and then purposely tries to sabotage the stock price through false and misleading "research reports", spreading rumors on media and social media. The ultimate goal of a shorter is to have the company being shorted fall into bankruptcy at which point, the shorter will not have to buy back the shares and return it to the brokerage, thus keeping 100% of the initial collateral. The brokerage will write it off as a loss on their books.

@seneca983 3 года назад

"false and misleading "research reports"" If it's really false, the company can sue. If it's a reasonable interpretation of publicly known facts there's no problem. "The brokerage will write it off as a loss on their books." A company going bankrupt isn't a loss for the broker (unless the broker itself happens to own that company's stock).

@russellowen222 3 года назад

The issue isn't when big companies simply 'take a punt' on the outcome of a business, it's when they become actively involved in its downfall. Thomas Cook, here in the UK, was a prime example of that. Short selling traders employed PR companies, circulated bogus rumors and more. In the end, the company went under, employees and investors lost everything and a small number of companies made a fortune.

@goneviral8814 Год назад

We need the short sellers and of course the government will make money on any profits

@murdelabop 3 года назад

Short selling has never made any sense to me. In one sense it's like you're getting someone to agree to give you money. In another sense it's like you're placing a bet with your broker. It has a loss side that would make a Las Vegas gambler blanche.

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@MoonLiteNite 3 года назад

You sell gum for 1$ a piece. Can i borrow a stick of gum from you? I promise to give you back a 100% like one within a year. If i fail to do so, you can have my 250k house. Also, every day, i'll give you 1cent. So you, as gum owner can accept this deal. It is a megawin-win deal for you. You CAN NOT come out behind. You either get my house, or make 31cents and get your gum back. And me, the short seller... I find someone who will buy the gum for 1$. Now i am holding 1$ and owe you gum. 3 days later, i find gum on sale for 75cents. I buy the gum and pay him the money. Now, i come back to you. Hello sir, it has been 3 days, here is your 3 cents i owe you, and here is that stick of gum. That is a shortsale Hope it helps :D

@seneca983 3 года назад

Short selling is like a loan; it's just denominated in some stock instead of dollars (or some other currency).

@mind-of-neo 3 года назад

Everyone seems to agree that nothing is wrong with the concept of shorting a stock. The problem is when they are able to do things to manipulate the stock down. Pushing a stock down is a lot more morally deplorable than pumping one up. Not that that's a good thing either.

@clintonhilary7736 3 года назад

@CatnipMasterRace 3 года назад

I feel like a lot of commenters have already said this but just to emphasize the point: Short selling isn't the problem. Over-shorting is the problem - ie what happened to gamestop where 140% of the stock in circulation was shorted...

@trent_k 3 года назад

Exactly! This can only happen if short sellers overplay their position. Don’t engage in a naked short and you won’t get squeezed.

@markhathaway9456 3 года назад

@@trent_k How could government regulate that to prevent unscrupulous people from doing it?

@trent_k 3 года назад

@@markhathaway9456 unscrupulous people already did over-short the stock, that’s what got them in this mess. They made their bed now they have to sleep in it

@markhathaway9456 3 года назад

@@trent_k I wasn't speaking about any particular case of it, just in general. If you're on about the AMC or GameStop cases, then I agree. They got caught by some wicked smart reddit people. Then some other big guys joined the Apes to hit back. It took a lot of money though. The reddit crowd (the Apes) couldn't have fought back successfully by themselves.

@barl3857 3 года назад

The real issue is stock markets shouldn’t be the driving force behind economies people’s livelihoods shouldn’t be put as risk for profits To make things worse since 2008 central banks are printing and endless supply of money to prop up the markets the only people benefiting are the rich that money go’s to them not the average person while there wealth increases year after year it’s the average person who’s going to ultimately pay with inflation and taxes Rich people don’t care if the dollar is worth half of what it used to be because they have Assets that will only increase in value over time the average person can’t even afford a home the system is rotten to the core

@individual1-floridaman491 3 года назад

So... it's gambling. 'Risk management, market analysis, hedging etc. etc.' is just 'guessing, looking at the form guide and spreading your bets' - gambling. Can't we just call a spade a spade.

@phieyl7105 3 года назад

Imagine bullying someone with a dream and profiting off of it.

@joshuajoe1419 3 года назад

Ignore gg (or report him). He’s a bot.

@siddoo6778 3 года назад

agree with you 100%

@aa4914 3 года назад

why? just leave people alon lol

@Zeroneii3 3 года назад

if your non a bot say your credit card Info

@emilyfranklin8190 3 года назад

I have about 5% of my portfolio in Uranium stocks, Any advice on any other stocks that I can grow my $300k capital to a million dollars?

@elenagomez9890 3 года назад

You can buy and hold tech stocks.

@Jme--- 3 года назад

I must say it's EASY and HARD to make that much profit. EASY because it's very possible to make that much, and HARD because you'll need professional assistance to do it, I'd suggest you get assisted by a Market advisor.

@Mcdd7-_- 3 года назад

@@Jme--- This is totally true, but how well does a financial advisor improve your profit? what is the experience like using an advisor?

@Jme--- 3 года назад

@@Mcdd7-_- I can’t disclose too much , but yea I’ve been using a coach in the person of ''Freda Lynn Johnson' 'and through her guidance, I've been able to make approx. $24,000 in dividends on a monthly basis . It is pretty straightforward, not as complicated as it used to be.

@emilyfranklin8190 3 года назад

@@Jme--- This impressive! How could someone go about getting investment guidance from a coach like that. Would you mind sharing your coach's Info?

@gbxmusicchannel3836 3 года назад

The biggest problem in the market is the FED and the government with the cheap money inflating the stockmarket. Fun fact: fundamentals doesn't matter anymore and if your company goes bankrupt the government will bail you out so no reason at all to manage risk or waste your time trying to run a profitable company.

@ktktktktktktkt Год назад

Shorting is not very useful for hedging purposes. As you described in the video, shorts can be dangerous. There are much better ways to hedge a position. Instead, I would say shorting is useful for creating certain types of bets which are not otherwise possible. For example, as described in the video, you can, within a single industry, buy one company that you think is higher quality and short the other which in effect is a bet that regardless of the future of the industry, the company you bought will do better than the other company.

@Ganjor420 3 года назад

Winning, not because you did something good but because you had lots of money that you could bet on someone else losing... isn't that the dream of capitalism? Money is everything, who cares about creating something of value.

@netizencapet Год назад

The problem is the role of large scale leverage or borrowing in the investment process. Banning leveraged buyouts and short selling would lend much more stability to financial markets with better outcomes in the labor market: the market the majority cares most about.

@jayrider9240 3 года назад

Borrowing has consequences. It's that simple.

@MoonLiteNite 3 года назад

Nicely said. Most people do not understand what short selling it. At the most basic level, it is borrowing something and promising to give it back, with interest, very high interest at that.

@Sean-fj9pn 11 месяцев назад

There is absolutely nothing wrong with short selling, no more or less than buying! Why is it okay to buy a stock expecting to profit, but not okay to sell one for that same purpose?

@ralphsondoni707 3 года назад

Shorting should not be allowed. Why bet against a companies success ? Destroying companies is unamerican. Leads to job loss etc. If you don’t like a company don’t buy stock in it .

@clintonhilary7736 3 года назад

@agasd67654asdga 3 года назад

Short selling is not the issue, the issue is not considering the risk involved in a particular trade....such as "naked" trades

@icjmk2890 3 года назад

We’re not against short selling that’s needed to balance things out, we’re against naked short selling

@ashneilbhatnagar9242 3 года назад

Calm down, banning short selling would be bad for EVERYONE.

@winstonsmiththx1138 3 года назад

So says you. You offer no proof or even an example nobody will take some RU-vid commenter's word for anything.

@ashneilbhatnagar9242 3 года назад

@@winstonsmiththx1138 No actually, short selling allows the stock to get closer to its fundamentals. Short selling allows for market efficiency. Short selling reports have exposed fraudulent companies and have saved investors from losing tons of money. Short selling allows for arbitrage methods to work. Short selling allows for people to manage risk in the market and finally short selling allows investors to generate income on stocks that are lent out to the short sellers (assuming your broker has a program for this).

@winstonsmiththx1138 3 года назад

@@ashneilbhatnagar9242 well now that I have examples and you've actually made points I disagree with all of them. I think you are making excuses but that's my opinion

@ashneilbhatnagar9242 3 года назад

@@winstonsmiththx1138 Well you’ll want to recheck your opinion because what I said is facts.

@ashneilbhatnagar9242 3 года назад

@@winstonsmiththx1138 Dont know how what i said are “excuses” i have no vested interest in the the firms that short sell. But if i wanted to go short sell i would go short sell with my broker because that’s what free markets are for

@user-mu5iz8qy1z 3 года назад

Which investment is profitable right now?

@David-ct1lc 3 года назад

Yeah you are right with the current rise of bitcoin, that has made to conclude that no time is too late to invest in Bitcoin

@user-rn3ip8sk6g 3 года назад

I just got recommended to him on telegram and I invested, please how good is he?

@3RAN7ON 3 года назад

That's interesting that short selling has been banned before. What if you're holding a shorted stock when the ban goes into effect?

@cainabel6356 2 года назад

Then you have to buy back the shares that you borrowed.

@strider06 3 года назад

This comment section is so dumb. Short selling is and should always be legal. Just cause you got burned on some meme stocks doesn't mean it should be illegal. Its to keep the market in check. God damn so many people doing things they don't understand. Naked short selling is illegal and should remain illegal.

@ThaRealERAQ 3 года назад

of course it should.

@georgeemil3618 3 года назад

8:44 "They're visiting companies," If institutional investors are discovering things by visiting companies, then they are trading in insider information.

@museholic7000 3 года назад

Cumon guys. You borrow something from someone, sell it, then buy another at a cheaper price so that you can give it back... what could possibly go wrong...

@djmerchant 3 года назад

Explain something to me. I have been fascinated about the short game ever since GameStop, AMC, etc. You can never lose your money if the stock declines, "But you can lose unlimited amounts of money if the stock increases". HOW? Is there a time period when your borrowed stocks are due back the owner? Can't someone shorting a stock just hold those borrowed stocks until it comes back down? I have never seen that part explained.

@AnotherDayattheDock 3 года назад

they will get margin called if they hold too long without filling a margin maitence

@fredgalaxy7632 3 года назад

It's easy to manipulate, infiltrate and dictate the failure of a company if you are an insider. You could set in motions the factors that would lead to a company failing, whilst investing in a acquisition firm under an anonymous account. When that company falls in the traps of the set in motion by the traitor, the latter, will acquire the declining company on the cheap. Will then sell for a large profit margin. There's alot of enemies when you run a business. They could be working for your own organisation.

@cilirhammersteel5515 3 года назад

Short selling should be illegal since it keeps companies from reaching their full financial potential.

@MoonLiteNite 3 года назад

Well first, once the stocks are publicly owned, it really doesn't affect the company, only the shares they haven't sold yet. Lets use a gum company. And you be the gum seller (the broker) and ill be the short seller. You sell gum for 1$ a piece. Can i borrow a stick of gum from you? I promise to give you back a 100% like one within a month. If i fail to do so, you can have my 250k house. Also, every day, i'll give you 1cent. So you, as gum owner can accept this deal. It is a megawin-win deal for you. You CAN NOT come out behind. You either get my house, or make 31cents and get your gum back. And me, the short seller... I find someone who will buy the gum for 1$. Now i am holding 1$ and owe you gum. 3 days later, i find gum on sale for 75cents. I buy the gum and pay him the money. Now, i come back to you. Hello sir, it has been 3 days, here is your 3 cents i owe you, and here is that stick of gum. That is short selling. How should that be illegal? If you don't want to be port of the deal, say no. That deal had no affect on the gum makers. They still make their gum, and they still sell it to the stores and whatever price they have set between themselves.

@markhathaway9456 3 года назад

@@MoonLiteNite The shorter plans to buy back the stocks he borrowed & sold. He would then own the company for practically nothing. That's a rather big deal.

@Opochtli 3 года назад

Shorttttttttts willllllll loooooooose

@dunggg 3 года назад

Why are people putting their money into Hedge Fund at all? Most don’t even beat the market, and they charge you shitload of fee that line up their pockets.

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@davidlaureta3569 3 года назад

More barriers to entry for investors and less regulation

@samuelcarter7031 3 года назад

It’s legal because speculation is legal

@markhathaway9456 3 года назад

Speculation is usually about investing in something more risky. How is shorting a form of speculation rather than manipulation?

@michelleclark8099 3 года назад

Rememer also: NAKED short selling.

@clintonhilary7736 3 года назад

@2centsreview 3 года назад

Yes it should be. And it is. And that's why anyone who shorted gamestop shouldnt have gambled more than they were willing to lose. What should be illegal is fractional reserve banking.

@seneca983 3 года назад

"What should be illegal is fractional reserve banking." Why?

@jackhamrogue9708 3 года назад

I'm buying GME. I just love the stock

@liggerstuxin1 3 года назад

I think you’re late to the party

@PooterGofckyourself-nh5ft 3 года назад

@@liggerstuxin1 nah, he's buying on the dip. GME go brrrr to the moon

@alib4184 3 года назад

Just go to Vegas

@jackhamrogue9708 3 года назад

@@alib4184 prefer my odds on this

@jungmo7576 3 года назад

if short selling is illegal then they cant control the commodity prices. LOL.

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@CoreyChambersLA 3 года назад

Keep short selling. CNBC should not be questioning the financial decisions of grown adults.

@clintonhilary7736 3 года назад

@MrIronJustice 3 года назад

Agreed!

@N0URii 3 года назад

everybody gangsta until a bunch of regular people make profit

@markhathaway9456 3 года назад

It's the idea of competition in a capitalist system. Everybody loves it until they face it. Then they run to Big Daddy Fed for protection.

@greyfox78569 3 года назад

Bad video read up on Naked Shorts which this video clearly left out on purpose as that was what was going on with Game Stop. Naked Short is where someone sells or shorts the same stock to multiple buyers artificially creating more stock, and driving down the price more.

@doomtomb3 3 года назад

I despise the fact Robinhood doesn't let users short sell.

@doomtomb3 3 года назад

@gg gg ?

@rosaliemiller3183 3 года назад

@NithishS99 3 года назад

I don't know about international markets but in India there is upper level and lowel level for a stock it neither allows a stocks go above the upper level nor below the lower level, in a single day

@rosaliemiller3183 3 года назад

@MoonLiteNite 3 года назад

Weird way of doing it. So what if something goes up in value? Like say some small company just invested the cure for cancer? Does their stock price just hit the max gain within .001secs of the markets opening day after day for months on end, until the prices reaches the market value? That would screw over nearly every normal investor, as they don't have the dedicated lines to get their buy orders in on time?

@NithishS99 3 года назад

@@MoonLiteNite this is to control the markets heavy volatility If the opening price is 30 Then lower circuit is 20 Upper circuit is somewhere around 45 Based on the opening price the range is determined. This range increases respectively with market cap

@markhathaway9456 3 года назад

@@NithishS99 Is it for a fixed time, like 2 hours or 1 day, or is the renewal of trading done by human decision?

@NithishS99 3 года назад

@@markhathaway9456 it is computerised... Volumes and other criteria factor in to determine the range of the day for a particular company stocks. People get into trouble when the stock they are holding is having some kind of bad news because as investors rush to sell the stocks it will eventually hit lower circuit and if there is no buyers you are screwed the next day, but in my opinion this circuit has saved more people from losing money

@seph9980 3 года назад

For a retail investor, why would you participate in a pooled short position, when you can buy a disposable stock option?

@clintonhilary7736 3 года назад

@rosaliemiller3183 3 года назад

@seneca983 3 года назад

Options have an expiry date so you'd have to predict that a stock price falls before that. For a physical short there's no cutoff date. Also, to buy a put option you have to spend money to pay for the option's premium whereas with a physical short you get money that you can use to take a long position in something else.

@avinash-dhumal 3 года назад

If short selling is legal then it should be shot squeezing legal

@rosaliemiller3183 3 года назад

@avinash-dhumal 3 года назад

@@rosaliemiller3183 I also trade in the Indian Stock Market...

@CoopersDescent 3 года назад

Yes, but the 3 day trade rule needs to go. It hurts the poor, doesn’t help them. They get stuck in a trade, and if something like today happened after open, they’re done.

@rosaliemiller3183 3 года назад

@MoonLiteNite 3 года назад

No kidding. It was apain to get my account up high enough to get margin and avoid such a stupid rule. And then i was just paying huge interest fees. Removing t2, or t3 or t5, whatever it is now. Would have made it so brokers would have had to put a freeze on buys.