Not wanting to be drawn into a long drawn out debate on shorting, let me just make one point in support of my rant.
I can see perfectly well how the mechanics of shorting works. I know how to short-sell. I don't have a CFD account, and I don't short.
However, the one point I'd make is WHY I think shorting is immoral - the point you seem to have missed. Shorting is selling something you do NOT own. I'm not talking about simply selling stock that you DO own - which many people mistake for shorting. That isn't shorting - that is simply selling.
But the mere fact that you sell shares that you do not own is immoral. It is a device. It is a contrived move.
The other defence that pro-shorters often make is that shorters have to cover at some point in time. But in these days of dark pools, HFT, etc, the covering is most often done ins such a way that we RARELY these days see a short-covering rally. In fact I can't really recall the last one of those I've seen in the last 8-10 years. It's all done off-market, or via drip-feed HFT algo trading.
As per my example of me selling your house - that is exactly what shorting is all about. You wouldn't like it if I did that, partly because I've made a profit out of selling your house, and partly because the value of your house has just dropped as a result. Short-selling shares in a company is no different. No different at all...!
The stock market originated as a central place where companies could sell shares in their ownership, as a form of investment, so that shareholders would become part-owners of the companies, and benefit through that, both in terms of dividends plus the capital appreciation of the shares.
Then along came the financial boys, the broker's firms, the investment banks, and the hedge funds - they all spung up over the last several decades, and all they see is the value of the share itself - NOT the value of the company. And they started trading those shares as if they had an intrinsic value - which they don't really. Once TRADING became established purely as a mechanism for milking money out of the stock market (which it is - that money has to come from somewhere), then some clever sod thought up the bright idea of borrowing shares, selling them, then buying back at a lower price. Shorting.
And as I pointed out in my post above, the original idea behind shorting was that it was a way of profiting from a falling share price, and you had to have either some inside knowledge or some skilled analysis to predict that a share price may fall. But over the last few years, the risk has diminished in shorting, particularly for the big end of town. They CAN and DO move the share price, using HFT, front-running at the close, and all the other moves that we have become depressingly familiar with recently.
It is the fact that shorting is the selling of shares that are not owned that I find immoral, and contrived. There is no other item that you could do that with.
And while I'm in rant mode again, I'd really like somebody to tell me, convincingly, just WHY we have a closing auction? If people and banks can't make their trades in the 6 hours of open market each day, what is the exact point of the 10-minute closing auction? It is to allow the big end of town to set the closing price, which is the only price that really matters all day long. That is the price they put on their ledgers. It is the price on the charts. And all that matched-price juggling we watch every day over that 10 minutes is done by computers. Yet, despite what may appear to be a closing price looking like the last price traded at 4pm, at the exact INSTANT that the match-up rolls through, it gets front run by the co-located computers and the price gets nudged up or down, usually by one or two shares, and it happens so fast that the time-stamp on those trades is the exact time of the match-up.
Why, of why, do we HAVE a closing auction at all? Trading should simply close at 4pm. End of story. I can think of no sane reason apart from closing price manipulation that we actually have a 10-minute auction at all, after 6 hours of open trading.
End of rant, and farewell - I only pop back in here occasionally these days, as the LYC threads have become so clogged up by the same few people either up-ramping blindly, or down-ramping blatantly. There is nothing to learn by reading those posts. Same people making the same points, and most having no actual interest in LYC as a company at all, and no financial skin in the game.
(20min delay)