Lent out shares

Don and Doug, cut me a slack here, we are fellow investors, I am not picking a fight here, just expressing my view and concern about the unfair trading practices.

Dmert hope you realise I was taking the piss out of Don, and some others on here are just having a bit of a light hearted joke because your opinion is very one sided.

Not to say it’s wrong or any one of us is right as everyone is entitled to their own.

A good example of why anyone should not believe anything they read online from any source and DYOR. Especially when it comes to WSB/Reddit and so on.

Your post on RLX, I get what you mean can be seen to take it too far.

I disagree with your post about GME being fair play. I’m not saying the shorters in that instance were good, but back to what I was saying earlier, if you truly believed that GME was a good investment, then on the flip side they allowed you to get in cheaper.

The reason they shorted the company was because it was in distress and had been mismanaged for years, so it was a reasonably good bet that it’s performance was likely to be abysmal. What took place was a whole new level of manipulation so to speak that took things in the other direction and people thought that was a good thing as a result. Lots of retail investors that joined in lost money not getting out quick enough. It was a gamble that paid off for some.

Both the crooks as you call them and the Reddit crew for lack of a better phrase, in the current market can back for or against the company. That is freedom of the markets to put your money where your mouth is.

Similarly I ask you to look at any company that offers leveraged shares or inverse views.

There are lots, and a popular one on this forum that does up to 3x either way. No one is jumping up and down about them.

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Please read the recent SEC report on the events that happened earlier this year or look for Patrick Boyles channel. It will teach you a lot. It’s very sad to watch another person this delusional. Investing is unfortunately one of those fields where non professionals can participate and so that brings a lot of irrational opinions, I’m trying to imagine the same spirit at a medical conference where a clear non professional is telling everyone how the heart works, disaster. I don’t mean to be judgemental but some of us studying years, work in the industry on prop desks and other positions, to be told how bad things are by somebody who clearly does not know anything technical about how brokers, clearing houses, funds, settlement systems etc works is simply offensive. Get an education first mate. And I’m not saying retail investors can’t be knowledgeable because they are but you are not one of those.

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Looks like my wording hit a nerve in you, Mr know it all, if you are not judgemental ,I wonder who is?
SEC Report in complete denial of what has happened in January and your recommended friend Patrick defends every word of it and sweeps it under the carpet, what a waste !!
Us Retail investors want transparency, no dark pools, no naked shortings, no short ladder attacks, no D- Limit orders , All we want is better regulations, more transparency and level playing field for everyone.
Regards

Agree the SEC report is very good. It is not in complete denial, it was simply looking at the workings of the market and deemed them reasonable for the protection of the three parties in any transaction. The reason some trading was halted was due to increased margin requirements at brokers due to the inflated trading, something that is in place to protect both parties in the trade, and this worked in this extreme scenario. No firms that acted as an intermediary for the transactions went bust, the only thing that took place was that investors on either side of the ‘bet’ either made a profit or a loss, as the market has always been intended to work.

I am a retail investor, and the system to me, works fairly but has room for improvement as below:

What does need looked at is PFOF. My view is all trades should be routed to the exchange first, and PFOF only allowed once a certain timespan has elapsed to help build liquidity in the markets, in which people are advised that on book trading is not liquid enough and to ask if you are willing to accept a wider spread before execution.

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Dear Doug, commission and spread don’t really concern me that much, I can live with it. All my worry is the After hours trading, Dark pools, they are like playground for SHF’s and HFT’s, they lack transparency.

Just have a read please.
SEC Report on January’s events

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They don’t need to read it. Someone has already read it for them and told them how to think.

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Oooh that makes sense.

As someone as said before:
(This was said before the Tech revolution of the 90s. - Wall Street (1987 film))

image

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Thanks for my next movie recommendation!

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It’s a bit dated. But it illustrates the 80s corporate finance, M&A, Corporate Raiders, White Knights, hostile takeovers.

The characters are based on some famous finance/corporate “stars”.

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Yeah i figured it would be, from 1987, probably why I hadn’t heard about it previously :joy: Still interested to give it a watch.

Let’s not pollute this thread further tho :zipper_mouth_face:

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And when it doesn’t you still going to come here and soak it up? Get mad at us or are you going to be mad at whoever they tell you to be mad at?

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Buddy, if you find it insulting when somebody recommend you to read anything, ahem, well, now we know where we all stand :see_no_evil:

Everybody have a wonderful day :joy:

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If you own shares, you don’t lose or gain until you sell the shares. If someone else makes money by lending you shares , I don’t see what the problem is? If you are investing for a long term, these temporary changes are meaningless really. I don’t believe any short seller has forced company to go bankrupt.

If you are investing via CFD, well that is very very risky (the warning says some 70% lose money)?

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I believe what @Dmert2009 and others are trying to say is that lent out shares allow/facilitate shorting which in turn if it is done on a large scale can create bearish momentum and ultimately a vicious circle/a self fulfilling prophecy sort of.
I can see that happening and being possible

  • But I doubt the extent of this effect in the grand scheme of things

  • I lack hard data to support this effect and see how widespread it actually is

  • I am not a fan of shorting, I neither like the economics of it, nor the ethos. I share Buffets views on shorting in this matter. However I believe, shorting has its (small) place and compared to some other instruments it is way more harmless and less devastating

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Except that shorting has provably been healthy for markets.

Heck, the GME’s events that lead to many retail investors losing quite a decent amount of money only have been so devastating because of lack of shorting 🤷

Sources

https://www.investopedia.com/ask/answers/012815/how-does-short-selling-help-market-and-investors.asp

More explanation

A short seller is going to act exactly as a long buyer.

He is going to sell a market top, and buy a market bottom, and pretty much at the same moments a long buyer would do it.

These operations help smoothen out securities’ prices.

The main difference resides in the incentive.

Incentives of long buyer, governments, investment funds, stock brokers, stock article publisher’s, exchanges, and everyone else, is for prices to go up and up and up. More money flowing, more bonds issued, more commissions, more advertisment money.

Those incentives have been proven to render markets extremely toxics and unhealthy. Finances disconnect from the real economy, bubbles are created, and systemic risks propagate throughout the economy.

The repercussions of which result in destruction of value, not only in the financial markets, but in the rest of the economy as well. People lose their jobs, their pension, their appartement, or even die.

Short sellers are the only players in the market with an opposed incentive. So much so, that on top of selling bubbles in formation, and buying markets dips, they tend to have to produce research paper of their thesis if they have any hope of not being liquidated.

Those are not to destroy a market, or steal anybody’s money.
These are to maintain a healthy link between pricing of financial assets and underlying real assets.

Without short sellers, the Stock Market is but a Ponzi.

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Ok, that’s enough :clown_face:'ing about. I left the topic after saying my piece assuming a genuine discussion might play out for those interested. accuse me of stifling free speech if you will but this has gotten ridiculous.

this is clearly not a discussion that is doing the community any good and the OP doesn’t seem to be leading the topic in any decent direction. So being the parasite short seller I am (funny how I have never gone short on a position but who cares :man_shrugging:) I will play the dirty evil Schmuck and draw this to a close. :man_facepalming:

Hopefully the next topic on the subject will be about the merits or demerits of the practice and an analysis of its influence. something that may be both enjoyable and educational to discuss.

@Dmert2009 If you plan to stick around for any length of time, consult the forum guidelines before launching your next self-righteous tirade. you started off alright then lost credibility as you kept pushing. everyone here is a retail investor, you don’t speak for any of us. in fact the retail traders don’t often use the community forum as they are too busy researching and managing their money.

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