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If many people short-sell a stock, it increases the supply of that stock and reduces the demand (an increase of people wanting to sell it) which drives down pri
by tg3 15y ago
If many people short-sell a stock, it increases the supply of that stock and reduces the demand (an increase of people wanting to sell it) which drives down prices. Short-selling isn't price manipulation, it's the inverse of buying a stock, which drives up the price.
- redthrowaway 15y agoThe same is true of simply selling the stock, except with a short sell there's a guarantee that it will be bought again. Now, a naked short sell can drive a stock's price down, but it's incredibly risky and can easily bankrupt the naked shorter.