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Short positions themselves provide a signal as to whether market participants believe the price to be too high. Giving the opportunity to short thus keeps downw

• gohrt 11y ago
  Indeed. The "market price" is really the "marginal price" of moving a share, not the average price over all shares. (For something you actually want to consume or corner, usually, if you buy 99.9% of all shares of something, the price of the lat 0.1% will be quite high. But if the market is frothy and people are bidding up shares irrationally/temporarily, while many others are just holding old shares and not paying attention, then the average price--once the excess buy-side money is spent, and there isn't excess cash available to bid for more shares-- will be lower