Short Selling Petition

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This might make an interesting discussion. TBH Iā€™m on the fence. I see it very much as people should be entitled to either invest their money in a company, in the expectation of it doing well, or if you think a company has poor management and is unlikely to perform well against its peers, or is overvalued, why not ā€˜shortā€™, for a potential profit if you are right?

That is free will at the end of the day to do one or the other, and we have leverage shares on this platform as well as many others.

Short selling has been around for years, and although ā€˜shortingā€™ can be bad for good companies trying to raise capital on an extreme scale, people need to ask why would anyone realistically short a ā€˜goodā€™ company, at the greater risk of making a loss?

I dont totally disagree with their argument, just the same on the opposite end of the scale something needs to be done about pump and dump shares (and this is where trading suspensions come in to an extent). I just dont think they truly have a grasp of what they are asking for here.

*There is a difference between short selling and lending shares.

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Iā€™d rather sign a petition banning PFOF (payment for order flow), which created conflicts of interest directly.

Not all short-sellers are evil. Oftentimes short sellers like Jim Chanos or Michael Burry expose fraudulent companies (or flaws in the system) that would cost society and us - retail investors - millions. Short-selling can be exploited, however, so better regulations are needed.

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please remember to update us on the topic once the petition inevitably fizzles out with little impact.

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Signed and shared, hopefully FCA does something which i doubt but fingers crossed

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Its been illegal in the UK since 2012 IIRC, but still widely used in Europe.

Agree PFOF is potentially much more worse and far less transparent to retail investors than having to tighten the regulations on short selling and pumping/dumping stocks.

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Short selling, pump and dump, lending out the shares, naked shorting in dark pools and cellar boxing , all unfair practises and must be eradicated to provide a fairer trading and investing.

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@Dougal1984, today isnā€™t April Foolsā€™ Day. :slight_smile:

Only people without too much financial knowledge will ask such things. So Iā€™m shocked that you are ā€œpromotingā€ this.

From your link:

In many cases Ā£millions can be wiped off the value of a company by coordinated groups of short sellers spreading misinformation and rumours, causing investors to panic and sell their stock.

Itā€™s an one side vision, donā€™t you think? The same coordinated groups also exist to pump up the stocks, spreading misinformation and rumours, causing investor to do the opposite, to FOMO and buy their stock.

But only coordinated groups of short sellers spreading misinformation and rumours are evil persons.

Ilegalizing short selling will create more damage than good, as pumps will flourish even more and when the shares finally came back to reality, it will be more punishing.

It seems that only direction for shares is up, and that anyone that think a stock is overvalued and want to short it, is a criminal.

The long investors and short investors are essential to reach a closer to reality valuation of a company, without one of the sides, there will be a distortion on the price formation mechanism.

About fairness, financial markets as life, fairness is an illusion or utopia.
The faster, better-informed, more knowledgeable, the stronger, the prettiest, the funniest, the person with more merits or skills will always have advantage. In the dating game, for example, there isnā€™t fairness. In some species, only the strongest male wins the female.
So people should stop whining about fairness and try to create a competitive advantage for him/herself, as in nature, only the strong and resilient survive.

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From the link in the OP:

Short selling is already illegal in Germany, who pushed for a Euro wide ban in 2011.

Fact checking:

Short selling isnā€™t illegal in Germany. Only naked short selling was announced in 2010 , during Euro Sovereign Debt Crisis:

(Reuters) - Germany has announced a ban with immediate effect on naked short selling of euro zone government bonds and in shares of the countryā€™s 10 leading financial institutions. It also banned naked transactions of credit default swaps (CDS) linked to euro government debt.

Also during the peak of COVID crisis, some countries imposed temporary restrictions on trading, such as short selling to try to have more stability, (to not exacerbate the sell-offs with the short selling). Temporary prohibitions on short selling are common practices in crisis situations.

Another example, was the bankruptcy of Wirecard in 2019, that BaFin banned short selling of the Wirecard stock, meaning that short selling German stocks arenā€™t banned, only in special situations.

So the article in OP, is a bit of misinformation, lacking credibility and financial literacy.

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Short selling is actually a good thing. Some people want the share price to fall (Short sellers). Some people want the share price to increase. That is what the free-market force is all about the achieve equilibrium.

Keep in mind short sellers also take a significant risk like anyone else aiming for a multi bagger return. Example: legendries short sellers Michael Burry lost significant amount of money.

Also keep in mind many of retail traders are going short as well as Long to benefit the price movement in both directions.

What is probably need to be banned is spreading fake news, false accusation, which sometimes funded by whales shortsellers to create FUD (fears, uncertainty and doubt) to scare people.

I fully agree about banning PFOF (payment for order flow), which created conflicts of interest directly. This practice has been banned in the UK, AU, and few other countries.

Also, it might be good to make the ā€œDark poolā€ illegal. It is against the principles of the free market, transparency as the people could do significant amount of trading in the Darkppool to move the price but unnoticeable to public/other traders for at least for a few days.

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I have no objection to short selling. Short positions are usually quite low and if there is enough buying power then any impact is usually minimal.

I suppose it does depend on what you buy. Iā€™ve held rubbish AIM shares that are subject to shorting. At the time I would scream that it was manipulation blah blah but actually the company was just crap!

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Easy tiger , We live in a HUMANE WORLD , We donā€™t live in a jungle , this is not an animal world , this is definitely not the survival of the fittest.
It seem like someoneā€™s wording hit a nerve in you, whenever short selling mentioned , you always get offended and start trying pervasively to impose your opinion on us.
I have no idea why you are so touchy about the short selling, it is a tool that widely used by SHFs to make more money , Nothing to do with price correction BS ,unfortunately it is a legitimised bare faced cheating.
Would you tell us your expert opinion about the naked shorting in DARK POOLS and cellar boxing.

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Okay, Iā€™m tired to hear you use buzzword you have no clue what they mean.

Letā€™s have it.

According to you, what is naked short in dark pools then?

Or just dark pools. Heck, just naked shorting, since you had a problem with shares being lent out ā€œfor naked shortsā€ :rofl:

Please explain to us any of these in your own words, what does it mean?

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Commence furious googling.

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So the evil short ETFs will also end?! A financial instrument that also the retail investors use, not only the demoniac Hedge Funds. :slight_smile:

Btw, a new short ETF was launched today, Tuttle Capital Short Innovation ETF (SARK), that shorts the FOMO/Buzz ETF from Cathie Wood, the popular ARK Innovation ETF (ARKK).

Note: Avoid asking T212 to add it, because itā€™s an US-domiciled ETF, and due to that not eligible to be added.

Btw, the ETFsā€™ asset managers also lent shares in their ETFsā€™ portfolios, itā€™s an important source of revenues for the ETFs, that allow lower ETFs fees.

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This quote is utterly unfair ,it is belittling the less educated, less fast, less pretty, less funny, less knowledgeable, less strong,less skilful, less athletic, less able (The list goes on and on ).
In your opinion they have no space in this world, because they are less of all the things you said and you are more .
People should be banned from this forum for making unfair comments like that.
Their sarcasm will get them nowhere, this is not their personal playground that they can do and say anything they like.
This community forum should be for everyone to express their knowledge and opinions .

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I believe you are both doing so here, so I would not get too offended if someone expresses an opinion contrary to your own

Iā€™m also awaiting the definitions of naked shorts and dark pools as Iā€™m not too clear on them :wink:

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Rlx isnā€™t belittling anyone. He is making a statement based his experience and understanding of how society functions. You are doing more belittling by arguing the opposite just for the sake of arguing.

If a company wants to succeed they have to provide a product people want and to become a market leader they have to do so better than their competitors. Iā€™m not going to buy something from a company that just complains how they arenā€™t as well off as others as an argument for why they are performing poorly. The same goes for people, you donā€™t have to be the best to everyone, only those who matter otherwise nobody would achieve anything. You are the only person who went so far as saying they have no space in this world.

Give us less of your opinion and more of your knowledge, because it wonā€™t be others getting banned at this rate. What you posted could be considered a kneejerk reaction for the sake of having an argument. This is not your playground either.

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You just picked up my last comment and ignored the whole point , what a shame !!
Some people have less or no moral compass , no mater how hard they try ,they just canā€™t have nothing nice to say.
Sorry to made you waiting about the naked shortings in dark pools and cellar boxing, If you say please and ask me nicely then I would consider to enlighten you.

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I did ask nicely. Please enlighten us.

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