But isn’t it unethical and morally disturbing to short companies and profit from their share price moving down in value?

Posted By Robert On Wednesday, March 11th, 2015 With 0 Comments

There is nothing wrong in publicly stating that you are negative about a stock and profiting from any downswings as long one declares that he’s short – just ponder for a moment – how is this different to an investor who ‘buys’ a stock and brags about the merits of the company he invested in. This is the nature of the market consisting of buyers and sellers. When shorters focus on a particular company, there tends to be reason; either overvaluation – or even wrongdoings of the target companies.

Recently, especially with the crisis facing the UK financial industry and market turmoil there have been some calls from certain people for a ban/limit on the ability to short a security. Can shorting be ever contained?

For every investor or speculator that sells there is one the other side that buys so I do not think personally that banning short selling is an answer to stopping volatility. Market manipulation does need to be investigated but in the grander scheme of things I don’t think we should restrict free trade and ban short selling.

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