There seem to be some missing the basic principle of supply and...

  1. 1,136 Posts.
    There seem to be some missing the basic principle of supply and demand at play. If an overwhelming amount of (borrowed) stock is put for sale naturally the genuine buyers will not be sufficient to take the excessive quantity and the stock price will fall. Seriously, dump a large (borrowed) quantity of any stock on the ASX and you will likely wipe several lines of the buy queue. Do it several times quickly and you don't need to be a Rhode Scholar to work out what will happen.

    Very simple but only available to be exploited to full effect by those with access to large amounts of stock to steal, umm, I mean borrow, for a while. Of course if its your stock you will get it back, it just won't be worth as much when you do.

    If you think this practice is defendable you are dreaming, or maybe profiting from it.
 
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