4 ms·

Short selling is an incredibly important piece of any reasonable stock exchange. It also dates back to 1609 so it's not exactly a new technological innovation.

• Twisell 9y ago
  From the very article you reffered to me : Short sellers were blamed for the Wall Street Crash of 1929.[15] Regulations governing short selling were implemented in the United States in 1929 and in 1940.[citation needed] Political fallout from the 1929 crash led Congress to enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule, and this was in effect until 3 July 2007 when it was removed by the Securities and Exchange Commission (SEC Release No. 34-55970). So one is actually entitled to wonder if regulations are not needed. While the article fail to explain categorically in which way it is "incredibly important".
  • notyourday 9y ago
    If there was short selling that could have been blamed for the crash of 1929 it was what is known as a naked short selling. Since non-market making short selling now requires having a locate, it is impossible to sell short more shares that one can reasonably borrow.
  • mikeash 9y ago
    There's a really big difference between blaming short sellers for the crash, and short sellers actually being the cause for the crash. Short sellers got blamed, but weren't necessarily at fault. There's a further implication that the crash is the cause for the Great Depression, which is likewise fairly unfounded.