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Short selling is legalized gambling, much like options. Lots of people see both of those activities as immoral.

• throwaway894345 6y ago
  Because it’s risky? Surely the same applies with respect to investing in a company, no?
  • apta_ 6y ago
    No, it's not about the risk per se. As you point out, investing in a company involves risk, however, there is prospect for generating value that corresponds to said risk. Shorting (exactly as with gambling) creates risk with the hope of gaining money, without any corresponding value being created. Not only that, shorting exposes three parties to the risk of a stock or asset (the shorter, the original owner, and the new owner). When engaging in regular stock buying and selling, there is exactly a single owner at a given point in time, and the risk is transferred accordingly with only one party being exposed to it at a time. Why is the former dangerous? Because it can easily trigger chaos in the economy when many people are exposed to the risk of an asset, when none of them truly own it (not dissimilar to what happened in 2008, selling debt for debt triggers this sort of chaos as well). Not to mention that shorters profit off the misery of others (exactly the same as interest bearing loans, another parasitic and immoral practice). Shorters wish for the collapse of the stock price. This is unnatural and destructive. This is a good article I came across that discusses some problems with shorting: https://practicalislamicfinance.com/2020/02/17/short-selling-halal-or-haram/ https://practicalislamicfinance.com/2020/02/17/short-selling...