A little advice for those who do not want their personal stock shorted. In US and many EU Exchanges brokers can only lend stock that is in a margin account. Once you have margin in your account most brokers put all your stock in margin. Advantage to you is much higher liquidity Advantage to broker, more shares to loan and loaning for shorting is very profitable with zero risk. If you do not want to support shorters simple do not allow stock to go into a margin account. I do not know AU rules but I assume since they are part of S&P they are similar to US. Remember even if you have plenty of money in your account you are borrowing shares at Credit card interest rates. This quickly eats into profits or adds to loses.
JMO but my guess is that all but two of the comments above are from people that have never read a book about shorting or understand what shorts do. First Shorter's never want to drive a stock down. They know unless total shorts are well over 10 % do not have an impact. Because shorting is so expensive they will have to buy to cover which means shorts have to balance over time. it Just like buyers they only want to make money but hold the opposite opinion of where stock is going and how to make money on that change. No major exchange in the world bans Shorting. If it so bad, would it not be banned on at least one MAJOR Exchange? Simple fact is shorts stabilize the market. Bad news come out, shorts buy to cover limiting the drop. Good news comes out and stock starts going up more on emotion than the PE they short. This stabilizes the market from big swings.
One Fact many ignore is that shorts are a callable loans. From the following experience In 1999 2000 I will never short. Amason shot up to over Us$100 in about 2 years. a 90 X increase. I shorted at about 110 unfortunately it went to 122. I did not cover but used margin Home equity and CCs to cover. Very tense situation. It finally started falling. At $80 I was doing very well and it looked like it would fall father. Was looking forward to making lots of money. Unfortunately many people bought Amazone using Margine. Around 80 many people had to sell their shares. This resulted on me needing to return all my shorts. A year later SP was under 3.00 But I did not participate because they were no shares available for shorting. Since then If I want to do the down side I only use PUTs.
LYC Price at posting:
$7.04 Sentiment: Sell Disclosure: Not Held
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