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April 18, 2017

Short Selling OOTRBS-263

The whole concept of shorting should be illegal. It is nothing but breeding grounds for unethical and fraudulent behavior. There are no positive economy-building aspects of it other than fat cats desperately trying to save their money by stealing it from uninformed investors and calling it a "hedge" euphemism .

Wall Street shills will argue that this quickens the culling of bad companies but its a completely bullshit argument. The companies will go on their own if no one is buying their product or service.

There is a reason why an average Joe can't buy an insurance on property he doesn't own.
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I'll just leave this here: http://www.investopedia.com/university/shortselling/shortselling4.asp
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>>1966789
>liquidity
>quicker price adjustments
Cool arguments, completely irrelevant in the big picture.
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>>1966787 (OP)

>It is nothing but breeding grounds for unethical and fraudulent behavior. There are no positive economy-building aspects of it other than fat cats desperately trying to save their money by stealing it from uninformed investors

The exact same could be said for any short-term holding. Do you want to make buying securities and selling them within a set time period illegal too?
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>>1966852
Short-term holders provide an actual liquidity with minimal harm. They do not profit from tragedy of falling companies therefore destroying companies is not incentivized in this case.
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>>1966787 (OP)
>>1966811
>>1966877
>stock prices should just rise forever
>selling them should be illegal
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>>1966787 (OP)
>The companies will go on their own if no one is buying their product or service.

Except this is never the case if the business has monopolistic power
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>>1966886
Pretty much this. OP is a faggot.
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>>1966886
You can sell a stock you OWN just fine.
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>shorting is made illegal
>just buy put options instead
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>>1966903
Options are created by stock holders. These people do not have the incentive to destroy the company they are holding.
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>>1966916
>naked puts don't exist
>stock holders won't write puts to meet demand
okay newfriend.
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>>1966877

>Short-term holders provide an actual liquidity with minimal harm.

Pump and dumps are ethically and functionally no different from your conception of shorts and anyone who ends up with securities at prices distorted by these sorts of activities has been harmed regardless of whether they bought overpriced stock or had their existing holdings torpedoed by a short-seller.
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>>1966937
>one type of fraud is possible therefore ALL types of fraud should be possible
Nice logic.
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>>1966787 (OP)
I'm a huge Wall Street shill and I agree with you. Short selling is the biggest line of crap. Taking that concept with any other asset would be overtly absurd.

>muh liquidity
Mantra of the shills. Technology improved liquidity, not this hocus pocus crap so people can literally manipulate the market.

>>1966852
Short term holding is penalized via the tax code, so no, it's not the same thing as short selling.

>Do you want to make buying securities and selling them within a set time period illegal too?

>What is a pattern day trader with <$25000 in equity?

>>1966891
This is true but hopefully anti trust laws kick in when possible. This is a different argument though. There's nothing to say short selling would undue an inefficient monopoly.
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>fags trapped in underwater longs detected
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>>1966970

You're the one singling out one particular unhealthy and borderline unethical practice from the approximately eight million other unhealthy and borderline unethical practices that exist in the modern market.

So what makes this one special? Because it "incentivizes destroying companies"? So does pumping the shit out of one without making any actual investment to increase its value, or buying into one with the intent of selling off its subsidiaries and business lines for scrap, or for that matter, hiring a bunch of C-levels to run one from one quarter to the next until they can cash out their options.

>>1967001

>Short term holding is penalized via the tax code, so no, it's not the same thing as short selling.

Are you implying that the tax code exists as a punitive measure to discourage unethical behavior? Because that's what OP is talking about, not whether short-selling skirts around tax laws (which it doesn't).
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>>1967024
Short selling it's not a drop in the bucket (8 million lol, nice figure pulled out of your ass). It's a major force in unethical behavior on the market.
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keking at these poor bagholders
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All of these processes are how the market discovers the price of individual securities. Any limitation on any of them would hamper that.

Everyone should be able to express their opinion in the marketplace in any way they choose. It is healthy.

If you don't want free and open markets there are plenty of others around the world with plenty of restrictions.
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>>1967088
I express my opinion that your mother should die tomorrow and I should be able to buy life insurance on her.
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>>1967045

>It's a major force in unethical behavior on the market.

The market itself revolves around unethical behavior, we form (or more accurately reform) multi-billion-dollar conglomerates, hire tens of thousands of people, with the explicit intent of engaging in unethical behavior within the market. Shorting is nothing, it's like complaining about the amount of undigested corn kernels in a septic tank.

I'm not saying it's right or wrong but when you get on here, as others do, riding a high horse about how X practice is unethical and we should do something about it, ignoring the true nature of a competitive marketplace that I daresay is unethical by design, you sound less like someone who is genuinely concerned about doing right by people and more like (to use the term that /biz/ has apparently only discovered in the past month or so) a bag-holder.
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You have a security
You sell it to me for a premium (because you believe the value gained from the premium will be, in your timeframe, greater than the drop in value of the security) and I agree to sell it back on a particular date
I immediately sell the security for market price
Value of security goes down (below where I sold it)
I buy it back (now I have both sold AND BOUGHT)
I return your security to you, you return my payment to me less the premium you keep

What is fradulent about this? You will only sell me your security if you believe you will make a profit on the end value + premium, I disagree and think I can make a profit splitting the difference, but it's not like I only sell and never buy. We just have a disagreement on value, just like literally every other transaction on a market exchange.

What, precisely, is unethical or should be illegal about this?
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>The whole concept of shorting should be illegal. 
said every totalitarian regime ever

maybe we can ban usury while we're at it?
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>>1967095
I'm curious to know what exactly it is you find undesirable about this arrangement. It's unclear how this practice "incentivizes" death (analogous to how short selling "incentivizes" corporate decline); you, as the policy holder, have no control over the time or circumstances of anon's mom's death, and if you were to attempt to influence that it would be an ethical issue completely separate from taking the policy itself. Similarly, one shorting a stock has no influence over the decline of that stock, unless one acts to cause or influence a decline, which is another matter in itself.
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>>1967516
If you are the only dealer of said stock you have a hand on what happens to it, therefore you should be held accountable, just like any other investor, or more.
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>>1967516
This.

Who the fuck really is anti short selling? It's a natural law that should be allowed
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>>1967528

>Who is anti short selling?

Not to sound condescending or anything but in general it's people who don't understand how financial markets work. That's why people who don't understand how they work should not be allowed to influence or regulate it. That's how you end up with poorly valued and unstable markets. Again, there's plenty of them elsewhere in the world.
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>>1966787 (OP)
>The whole concept of shorting should be illegal. It is nothing but breeding grounds for unethical and fraudulent behavior. 

I can tell you don't really understand the market very well.

>There are no positive economy-building aspects of it 

Sure there are. There are technical positives (liquidity) and there are more global positives (if a company is heavily shorted, it's a signal to the market of problems either in management or the product being produced or in that sector of the market itself. Or a sign of questionable accounting, etc. All quite valuable.)

>other than fat cats desperately trying to save their money by stealing it from uninformed investors and calling it a "hedge" euphemism .

You don't even realize where the stock comes from that gets borrowed to short, do you? It's mostly from large institutional firms or very large individual holdings. Fat cats.
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>>1966886
>>1966894
Bernie will never be president go get your kneepads then kys Op.
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>>1966787 (OP)
Inb4 Op also opposes eating meat bc animal feelings

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