2023 BrainChip Discussion, page-3473

I really don't understand. AFAIK If a short seller wins, the lender looses.

from the ASX

What is Short Selling?

Short selling is one of the most difficult concepts for novice investors to grasp.

The goal is to profit from a falling market by “borrowing” shares in a company to sell at the current market price, and buy those shares back at a later date after the price has fallen. The difference between the initial sell price and the later buyback price is the profit.

Short (Sell)

Going “short” is the opposite; you profit when the share price goes down.

• You believe a companies share price will fall
• You sell 1,000 "borrowed" shares at $58
• The share price falls to $42
• You buy 1,000 shares (to close the trade) at $42
• You made a profit of $16 per share

How can you sell shares you don’t own?

The most common way is called “Covered Short Selling” and it involves “borrowing” the shares from someone else (organised by your stockbroker).

To open a trade: You borrow shares and sell them at the current market price.

To close the trade: You buyback the same number of shares and return them to the original shareholder.

Another way is to “Naked Short Sell” and it involves a stockbroker placing a sell order on your behalf, even though you haven't borrowed any shares (hence the term "naked"). To close the trade you must buy back the exact number of shares that you originally sold.

Remember that everything is done on a computer. You’re not actually buying and selling a tangible asset; all that’s required is that the numbers in the regulator’s computer “even out” at the end.

Why would someone allow their stock to be short sold? Lenders can charge a borrowing fee which is passed on to the short seller. This is also why short sale positions tend to be shorter in investment duration than long trades.



What is difference between a shorter believing a stock is overvalued versus a shorter actively forcing the price down by tactical selling
It really doesn't matter everyone's investments decisions are their own.