"Shorting bans are the WORST intervention ever, because they serve to do nothing but remove liquidity in a market that is already starved with liquidity. Without short covering, there can only be REAL buying that drives prices up, and no fund is going to take the view of driving prices up in a market were they are reliant on someone else having a positive view to take them out at a higher level."
I'm always keen to learn and there are many sharp-shooters on this forum.
I am one of those many [to the professionals, "naive"] people who currently do not short the market. I admit to feeling a sense of being cheated when I think about the fact that a market exists where you can sell something you do not own in order to cause the price to drop.
What if it was decided that banks/institutions or speculator folks could start short selling people's houses to drive down property prices..... Maybe a dumb comparison, but the resulting sentiment for the actual owners of the asset is the same - negative - and this reverberates negatively in other areas of the economy.
I admit to ignorance regarding this "removing of liquidity" notion. Who cares if liquidity is removed other than the brokers/funds/bankers/insto's etc who benefit from the volume of trades being placed globally?
Why should I care if noone is willing to sell any of the shares I own because all current holders are extremely strong and confident about the company's future [as far as can be forecasted/ estimated]? I'm truly interested to hear about the advantages to the wider [non-banking] community and economy.
I tend to equate the existence of short selling with the increase in market volatility and with the existence of trading bots/algorithms plus the fact that the insto's are able to see both sides of the market, there seems to be only one winner in the long term. Like a casino, the odds are stacked in the banks favour, so why should a non-professional trader choose to invest any of their hard-earned money on the bourses in the future? And if they don't, what is the future for the industry?
These are real questions by the way....all be they penned by an amateur.
I admit that I have toyed with the notion of introducing short selling into my trading/investing strategy but there are several administrative hurdles to jump prior to commencing and I haven't gone through the motions. However, I'm not sure this would be a profitable endeavour either as the bots work both ways and I am not the visionary that Mitta/Funky/DG/RB and Voltaire [among others] seem to be. To do all the reading necessary would necessitate my leaving my day job and I'm not able [or ready] to do that just yet. Perhaps that simply means I should not trade/invest[?]
Well that's aired that frustration and hopefully I can learn a little more from the responses I receive.
Other than that, just need to say "Go the Wallabies" for tonight's game against the Boks. No doubt, it will be huge!
(20min delay)