• Fal@yiffit.net
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    7 months ago

    Why do you think short selling should be illegal? It’s just borrowing shares

    • MeekerThanBeaker@lemmy.world
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      7 months ago

      The way the stock market should work is someone investing money in a company they believe in. If the company does well, then you can receive dividends and/or sell some later on to turn a profit.

      But greedy people have turned it into a game, into gambling. People who do it for a living know all the tricks, have supercomputers, have knowledge of other people’s investments to create algorithms.

      Has almost nothing to do with the company itself. They contribute nothing to society. Borrowing shares to short a stock is just an extension of that. You can make a lot more money that way, but again… it’s gambling, not an investment in a company.

      • Fal@yiffit.net
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        7 months ago

        Most of what you’re saying isn’t really a problem that affects anyone. You can still buy shares and collect dividends. How many shares short, or how often someone buys and sells a stock has 0 bearing on that. In fact all of that actually creates the liquidity that lets you buy fractional shares instead of having to buy in 100 share lots like you use to.

        And short sellers are actually pretty important to the markets. They keep companies honest by having an incentive to investigate and publicize frauds and overvalued companies. People put way too much weight in how much impact shorting has, or people trading derivatives

        • MeekerThanBeaker@lemmy.world
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          7 months ago

          I appreciate your thoughts. I admit I’m not too involved in shorts and there are bigger issues with the market than that. I just prefer that people wouldn’t bet against a company simply to earn money. It’s not going to change anytime soon, if ever. I just would prefer that stocks for sale were to invest in a company to help it grow, and not… I think this company is gonna crash… let me make money on that prediction.

          • Fal@yiffit.net
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            7 months ago

            I just would prefer that stocks for sale were to invest in a company to help it grow,

            Buying stock on the market has no impact on helping it grow. The only money that goes from investors to the company are from the IPO or any additional share sales, which aren’t common.

      • NegativeInf@lemmy.world
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        7 months ago

        Short selling helps prevent stock market bubbles by correcting overpriced stocks, ensuring prices reflect real value. It also allows investors to hedge against potential losses in their portfolio, making the market more stable and efficient.

        • DragonTypeWyvern@literature.cafe
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          7 months ago

          That’s what stockbrokers say, sure. They don’t actually care, they’re brokers. They make money from the sale regardless, and the more kind of sales and services they can make and charge for, the better off they are.

          Especially when it helps create a labyrinth of industry specific terms and rules they know and you don’t.

          That’s why they were laughing at the GME bullshit, like Redditors thought they were the ones losing money. Every little retail trade had a percentage that went into their pockets.