All IMHO. PS This post is meant to be sarcastic however I believe it is also correct.
Once upon a time in the long forgotten kingdom of live traders buying from one another with lag times (sometimes the next day rather than the current microsecond)in price discovery/ arbitrage opportunity the case for short selling to help balance out the real value of a stock may have been valid. That is no longer the case - with HFT 'special participants' now have full price discovery across multiple exchanges before the price has left the exchange (close to the speed of light) and reached everyone elses computer's.
Fudamentally the object of a stock exchange is to provide a means for companies to raise capital and for shareholders to share any rewards. Clearly the field is littered with the disasters however the fundamental expectation is a rise in value ie buy low sell high.
Short selling and the various related derivatives are a convenient avenue for the well heeled and greedy to overpower a single stock and push its prices to unrealistic lows. This turns the stockmarket from a place of capital raising and investment to a casino designed to rip off retail investors who lack access to inside information and do not have the financial wherewithal to retaliate. Short selling has no other reason to be.
By all means let the gamblers and manipulators have a place to gamble the ups and downs of the whole market with the SPI or whatever and let them have derivatives in individual shares. They can determine whatever 'virtual real price' they deem appropriate. HOWEVER, they should not be able to manipulate these indices by short selling the stock.
So basically we put things out front for everyone by creating two separate platforms: 1) The ASX Capital Platform where companies can raise money and shareholders can buy shares they like and disopose of those they don't. 2) ASX International Casino - derivatives to boggle the mind, toss them a few extra bucks and your computer can get the info faster than anyone else, why not throw in a roulette wheel and some card games. An online casino for all - blitz the opposition.
