- shorters make 10 cents, investors lose 10 cents. Response - this will only happen if the investors sell when the price is low. Arguably, shorting is more risky than going long. Personally, I would never short, I couldn't sleep at night knowing that I ultimately had to deliver stock back that I didn't actually own. However, informed investors should be asking themselves the question 'Why were/are shorters keen to short ADN?' - Insto's must have thought 30-40 cents was a reasonable price. Response - No, they were forced to buy as the have to mirror the All Ord Index and ADN joined the Index. Prior to joining the Index, I'm not aware of any Insto's being substantial holders in ADN - a big red light flashing IMO. - Why would Insto's who own the shares lend them out to shorters to drive the price down? Response - this is a very good question and I've wondered the same myself. I do recall a few years ago that one of the big super funds tried to get all the large super funds to agree to not lend out their stock so that shorters couldn't drive the price down. They were unsuccessful. It may be that the big share owners (super funds, insto's) want to earn income on shares they own. Maybe someone who works in broking can provide a better explanation re this question.
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