3 ms·

I couldn't possibly disagree more. It's not a problem, it has no real impact, what impact it has is likely net positive, it is not a conflict of interest, and

by Lazare 5y ago

I couldn't possibly disagree more. It's not a problem, it has no real impact, what impact it has is likely net positive, it is not a conflict of interest, and it's impossible to form a coherent argument for why it should be illegal. There's a reason nobody who understands what's going on cares.

OnlineGladiator 5y ago
> There's a reason nobody who understands what's going on cares. Wow, what a condescending finish. I care and I understand. If I invest in a company, I don't want my shares to be lent out for the purpose of lowering the price of my investment. I would never buy shares on margin for investments I really care about, because it's obviously a conflict of interest. Why would I want people to be able to work against my investment? You can't possibly understand and argue that short sellers have no incentive to tank the price, and that's what they are betting on happening. And you can't possibly understand and argue that people that invest in a company have no incentive for the price to go up, and that's what they are betting on happening. You don't see a conflict there? I'm not saying it should necessarily be illegal, but why not make it an option to opt-out for people who care?
- skybrian 5y ago
  You forget that to own a stock you have to buy it first, and it's not in your interest if the stock is overpriced.
  - OnlineGladiator 5y ago
    I'm not saying short selling should be illegal. I genuinely think short selling is a critical component to a healthy market. I'm saying being forced to loan out all of your shares in a retirement fund with no option of opting-out is the problem. You should have the option to buy on margin or not. I consider this one of the most important factors when deciding which broker you want to use, and it's one of the many things Robinhood purposefully tries to drive their users away from because they make less money by making this transparent. If somebody profits by keeping something a secret from you, you should ask yourself why.
  - pkphilip 5y ago
    If a person is already holding stock, then clearly it is working against their interest to use their own own money to push the prices of the shares of the company down.
    - skybrian 5y ago
      Not necessarily, if they want to buy more. It's in your interest for the price to be higher when you sell.
- Lazare 5y ago
  If the short sellers are right, the price is going down long term if you lend shares to them or not. (The short sellers may not be able to profit from it as much, but a worthless company will be found out eventually.) If the short sellers are wrong, the price will not being going down long term, whether you lend shares to them or not; might as well profit from it if you can. Your mistake is in thinking your choice to lend shares to short sellers has any impact. If you're buying shares of Apple for your retirement account, the price when you go to retire will be whatever it is, regardless of whether your shares were lent to short sellers. Some brokers let you opt out of lending shares out, but if you're ever long some shares and you're afraid that the company is actually doing some major fraud and the price might drop to zero if the short sellers are given an incentive to publicize it then why are you long this stock?! Conversely if you're confident the company is healthy, then clearly the short sellers will just lose a bunch of money; why not take a slice of that?
  - OnlineGladiator 5y ago
    > If the short sellers are right, the price is going down long term if you lend shares to them or not. Your mistake is assuming predatory short sellers don't exist. > If the short sellers are wrong, the price will not being going down long term, whether you lend shares to them or not; might as well profit from it if you can. If people want to pay a premium to not loan out their shares, let them and adjust the price accordingly. That's how markets are supposed to work. Why do people buy Berkshire A instead of Berkshire B? I realize there is a subtle difference (apart from price), but I know people that pay the premium without knowing what it is. Shouldn't you be happy to profit from an investor's ignorance? Make it an option and let people vote with their money. That's what markets are for.
    - Lazare 5y ago
      > Your mistake is assuming predatory short sellers don't exist. In the sense you seem to mean, they literally don't. Short sellers cannot drive companies to bankruptcy. > If people want to pay a premium to not loan out their shares, let them and adjust the price accordingly. That's an option available to you. Some brokers do let you opt in and out of lending shares. Of course, it comes with a cost.

by Lazare 5y ago

OnlineGladiator 5y ago

> There's a reason nobody who understands what's going on cares. Wow, what a condescending finish. I care and I understand. If I invest in a company, I don't want my shares to be lent out for the purpose of lowering the price of my investment. I would never buy shares on margin for investments I really care about, because it's obviously a conflict of interest. Why would I want people to be able to work against my investment? You can't possibly understand and argue that short sellers have no incentive to tank the price, and that's what they are betting on happening. And you can't possibly understand and argue that people that invest in a company have no incentive for the price to go up, and that's what they are betting on happening. You don't see a conflict there? I'm not saying it should necessarily be illegal, but why not make it an option to opt-out for people who care?

skybrian 5y ago
You forget that to own a stock you have to buy it first, and it's not in your interest if the stock is overpriced.
- OnlineGladiator 5y ago
  I'm not saying short selling should be illegal. I genuinely think short selling is a critical component to a healthy market. I'm saying being forced to loan out all of your shares in a retirement fund with no option of opting-out is the problem. You should have the option to buy on margin or not. I consider this one of the most important factors when deciding which broker you want to use, and it's one of the many things Robinhood purposefully tries to drive their users away from because they make less money by making this transparent. If somebody profits by keeping something a secret from you, you should ask yourself why.
- pkphilip 5y ago
  If a person is already holding stock, then clearly it is working against their interest to use their own own money to push the prices of the shares of the company down.
  - skybrian 5y ago
    Not necessarily, if they want to buy more. It's in your interest for the price to be higher when you sell.
Lazare 5y ago
If the short sellers are right, the price is going down long term if you lend shares to them or not. (The short sellers may not be able to profit from it as much, but a worthless company will be found out eventually.) If the short sellers are wrong, the price will not being going down long term, whether you lend shares to them or not; might as well profit from it if you can. Your mistake is in thinking your choice to lend shares to short sellers has any impact. If you're buying shares of Apple for your retirement account, the price when you go to retire will be whatever it is, regardless of whether your shares were lent to short sellers. Some brokers let you opt out of lending shares out, but if you're ever long some shares and you're afraid that the company is actually doing some major fraud and the price might drop to zero if the short sellers are given an incentive to publicize it then why are you long this stock?! Conversely if you're confident the company is healthy, then clearly the short sellers will just lose a bunch of money; why not take a slice of that?
- OnlineGladiator 5y ago
  > If the short sellers are right, the price is going down long term if you lend shares to them or not. Your mistake is assuming predatory short sellers don't exist. > If the short sellers are wrong, the price will not being going down long term, whether you lend shares to them or not; might as well profit from it if you can. If people want to pay a premium to not loan out their shares, let them and adjust the price accordingly. That's how markets are supposed to work. Why do people buy Berkshire A instead of Berkshire B? I realize there is a subtle difference (apart from price), but I know people that pay the premium without knowing what it is. Shouldn't you be happy to profit from an investor's ignorance? Make it an option and let people vote with their money. That's what markets are for.
  - Lazare 5y ago
    > Your mistake is assuming predatory short sellers don't exist. In the sense you seem to mean, they literally don't. Short sellers cannot drive companies to bankruptcy. > If people want to pay a premium to not loan out their shares, let them and adjust the price accordingly. That's an option available to you. Some brokers do let you opt in and out of lending shares. Of course, it comes with a cost.