byrnemm

Why Short Sellers Are the Heroes of Wall Street

China's main Index is down, what? 66%? And they just now started allowing short selling. Why? Because short-selling is creates natural correction of the market by mitigatigating the over-inflation of value in an equity, usually caused by emotion reasons and not prudent ones.

i.e. - Google releases a solid earnings report and becoems such a popular company that everyone wants a piece and everyone starts buying, even to the point where its value is above where it should be. Short sellers are the intelligent people that are able to see this discrepancy and capitalize off it. I say intelligent because if they screw up and the stock goes way up the losses are limited only by margin calls.

everyone agrees naked short selling is bad. it violates nearly all economic principles. get over it - there is a difference.