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The issue is that to the public selling short just aint natural. Isn't selling sometimes blind too - selling blind to make a profit with no up front guarantee of having the stock reserved to purchase. That's just gambling. Isn't that what drove VW shares
up when traders had shorted them and then couldn't convert because there were no shares to buy!
Something else is wrong in that equation, because if shares were offered 'at market price' then short selling would fail:
Agree to purchase stock at $100 (market price)
Sell, sell, sell at 100, 95, 90... (say average 95)
Buy, buy, buy at 90 (making $5 per share)
But you lost $5 on the original agreement to buy, so its even so far - you have to gamble on the market continuing to drop (stimulated by other share dumping) and buy at $85 - making $5 (=5%) gain.
I suspect the markets only drop when stock is sold beyond what is available to buy, and that sounds like fiddling the books.
19 Sep 2007