Comment Re:a losing game (Score 1) 53
I don't think WSB is a good place to learn about hedge funds and short selling.
Naked short selling seem to be illegal in the USA and hence the other kind of short selling is borrowing someone's stock and then sell to someone else which doesn't increase the amount of stock.
But sure it resulted in one more stock being sold at a time when someone likely thought the odds was worse than for some other investments at-least and that someone is supposed to buy it back at some other time. If you think the market go by fundamentals and actual data and information then I feel that any downward pressure should increase others willingness to buy because it got cheaper but of course in the real world at some time scale people may be a bit of trend followers and trade out of price action. Anyways at that time when someone wanted to sell/short it it would seem to me like it's likely because they think the price is too high and then they buy back hopefully when it feels more worth buying which if it works if anything should help lower the swings in the market and make prices more accurate. Then again we have the trend followers and maybe participants willing to try to trick the market by driving price through specific price points and maybe you could collaborate with someone participating in an emission or something by driving the price down on small volume before or whatever and in the case of the short squeeze (but also possibly breaking specific price levels possibly simply to reverse your position and make money out of those driving volatility) likely rise price even further as you have to rush in and buy.
So maybe this wasn't a convincing argument and also I may not know what I'm talking about I'm just trying to explain it from my understanding and thought about it but they may be incorrect and I'm not a professional on the subject and may be wrong and you shouldn't base or do financial decisions out of what I just wrote. It may just have been waves in quantum fields creating space time which made up this message and nothing serious or thinking entity whatsoever. And I argue against myself I guess
I assume some participants may try to drive those watching charts to act but I also assume that long term short sellers likely want to do it on fundamentals and as a long term participant I don't need to care for all the movements if I think it's cheap I could buy and if I think it's too expensive I could sell.
Not financial advice and I'm a nobody. I neither have a wife or is somebodies boyfriend. So in conclusion: Hedge funds and short selling may or may not or be both good and bad & evil. Glad we could clear that out!