shorting explained - why lynas is where it is , page-4

While I take your points, Jantimot (I think), there is a difference between shorting as a bet that a company will go down, and shorting then making sure that the company DOES go down.

The first is a bet, pure and simple. It is a bet that the share price MIGHT go down. And that was the original modus operandi of shorting.

But the second example is what happens all too often nowadays - a big outfit will short a stock, and then MAKE the price go down. They do it with bots. They do it with HFT. They do it with "rumourtrage" - even on forums such as right here on HC, in the media both printed, online, and on air, in newsletters (remember Renee Rivkin, anyone?). The most insidious is the use of algorithmic trading (bots) to walk the price down, often through buying and selling between themselves, eg one computer selling to another, perhaps using two different entities (accounts, funds, whatever) but the same beneficial owner.

With that second - i.e. current - method of shorting, they can't fail. They are not betting that the price MAY go down - they are manipulating the price so that it DOES go down. Can't lose. Unless they get it wrong somewhere along the line.

And even the traditional short-covering rallies we used to see hardly ever occur any more to counteract the activities of the shorters. Much (?most) of the covering - the buying back of the shares to return to the lender - is done on the dark pools. Yes, I know that all sounds like conspiracy theory - but even ASIC, that toothless non-entity that employs thousands of people using taxpayer dollars but does nothing, recently published a paper that actually admitted they were "somewhat concerned" by the activities of the dark pools.

And re your point that they are YOUR shares so why shouldn't you be able to lend them out - why WOULD you lend them out, if you knew that they were to be shorted and the value of those shares was going to be destroyed? You'd have to have rocks in your head. Even thinking in the VERY long term and assuming that the share price would bounce back. Nowadays that doesn't always happen. The shorters drive the company into the gurgler!

I simply repeat my opinion that shorting is a purely contrived mechanism devised by financial smartarses - er, sorry, "engineers" - designed to rip money out of the markets, and the use of bots and dark pools have just made this so much easier.