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16/06/17

11:56

Post #: 25314732
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Originally posted by BabaRoga_space ↑

Super funds charge brokers borrowing fee, thus making money. They don't own the shares, or work with their money.
You have to remember that super funds are vast, and work over many years.
Some stocks being overly shorted, barely registers on their vast holdings.
Over long periods, stocks cannot be held down artificially by short sellers.

Brokers either borrow shares to short sellers directly or to brokers who do, for a ongoing fee.
They also bet against shorters, when they feel SP is pushed down to values they deem good entry.
They have vast funds also, and work long term.
They don't care if some of their holdings are in red over medium periods. Again SP will eventually realise it's fair value.
They will also often engage into betting against shorts they borrowed the shares to. By buying large quantities of stock and forcing short covering rally of SP.
So they make money in number of ways.

Again, most often they don't use their own money.
For example: Banks gamble with your savings, home, shares, etc. All the time
Basically almost no risk to them, but massive bonuses and rewards.
Huge risks to shareholders of banks and peoples savings, houses, etc.
Think GFC crash. People lost heaps of money, property, pensions, savings.
Most people who were gambling with money, got out wiyh massive bonuses and fortunes they aquired over the years.
Most banks also made huge profits by betting against investment products they sold to investors (basically bet that they will fail by selling the risk to investors. Thus making money on the their own self inflicted demise)

There you go, in a nutshell!

You cannot do anything about it or fight against it. So just forget you read this and don't stress yourself about it.

Cheers

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And don't forget the margin lenders. You borrow money to buy stocks, but you don't own the stock the broker with whom you did the loan notionally does through the margin lending agreement. So the broker can lend your stocks to a shorter to bet against you and force you to meet the margin call as the stock falls. So they make money from both sides and cover their risk. In fact margin investing is almost designed to induce the behaviour because it is in the interests of the lender to force your margin call to reduce their risk.

GXY Price at posting: $1.70 Sentiment: Buy Disclosure: Held
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0 Great analysis

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