Is Short Selling To Be Banned?

Graham_Devon

StevieJ wrote: »

What if they are not true and you sell your shares into a falling market (or stop losses kick in) only to bounce back the next day with you out of pocket and some hedge fund quids in?

Stop losses are gambles for just that reason. They can kick in even with manipulation of the share price. But this usually happens for just a couple of hours.

Those day trading may be concerned about false rumours. I.e. those playing close to the edge with no real concern for the company, or share holders in question.

Those investing in the company won't really be affected by false rumours. Their shares may be worth less for a few hours, but when the buying kicks back in, their shares will be worth more again.

StevieJ

Graham_Devon wrote: »

Stop losses are gambles for just that reason. They can kick in even with manipulation of the share price. But this usually happens for just a couple of hours.

Those day trading may be concerned about false rumours. I.e. those playing close to the edge with no real concern for the company, or share holders in question.

Those investing in the company won't really be affected by false rumours. Their shares may be worth less for a few hours, but when the buying kicks back in, their shares will be worth more again.

They supposed to be a safety feature not a gamble.

Graham_Devon

StevieJ wrote: »

They supposed to be a safety feature not a gamble.

Everything in investing is a gamble.

When I first started out, I asked the same question about stop losses. The answer I liked the most was simply "invest as much as you are willing to lose, don't invest more and rely on computers to bail you out".

Worked for me.

I've seen my shares open 20% down for no apparent reason and stop losses kick in. Big buy comes along and up the share price roars, back into positive teritory. However, this is mostly AIM stocks. I'm not sure you can trust anyone in that game.

StevieJ

Ark_Welder wrote: »

There is a difference between opinion and rumour. I might express an opinion about short-selling, but by stating that it is my opinion then there is no ambiguity regards its source. The problem with rumour is that it is uninformative - whether it turns out to be true or not - because reliable decisions cannot be made due to the uncertain nature of the information. By the time it is known whether it is true or false then it might be too late to act with certainty.

But rumour is going to persist because there will always be someone that wants to manipulate a situation, and there will always be those that want to feel that they have an 'edge' when it comes to information. But unless there is reliable verifiable way to back up what is being said it should be taken with a pinch of salt.

A rumour will always spread when it is about something that people want to believe.

This, you may have worked out, is merely my opinion...!

Same with insider dealing but if you are caught you end up in the slammer.

geneer

HAMISH_MCTAVISH wrote: »

Call me old fashioned, but shares should be a buy and hold investment, dependent on dividends to yield a profit.

"Investing" in a company that has already floated (usually) does no good for that company, it already accessed the funds from the float. So it's just speculation, paying off a previous speculator. And the short term managerial mentality of always pandering to the share price with the next set of quarterly results is a destructive force in business, IMO.

Equities "investment" has become equities speculation.

Short selling is the most visible facet of a system that has become rotten to the core.

It should be banned.

Good god almighty. I agree with Hamish.



Though I do get to wonder how Hamish was been unable to see how the housing "market" became a speculative enterprise.

HAMISH_MCTAVISH

Europe bans short selling of financial institution shares as of tonight.

A good start.

CLAPTON

HAMISH_MCTAVISH wrote: »

Europe bans short selling of financial institution shares as of tonight.

A good start.

just think

if we had been able to ban short selling at the time we left the EMU then we could have stayed in the EMU a month or so longer
.....
just think of all that lost benefit; makes you weep doesn't it?

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

Europe bans short selling of financial institution shares as of tonight.

A good start.

http://www.bbc.co.uk/news/business-14500731

Currently, just 4 nations, though.

I wonder if they can short FTSE, which implicitly is also shorting a few banks as well?