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Strategies & Market Trends : Guidance and Visibility
AAPL 272.55-0.1%Nov 14 9:30 AM EST

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To: SpinCity1 who wrote (17675)9/21/2001 5:32:53 PM
From: Hadrian  Read Replies (1) of 208838
 
RE: Short Selling....

I often hear that shorting adds to the float, etc. What about the effects of margin buying? Stock is purchased that would not otherwise be bought due to margin buying. If shorting is banned then margin buying should also be banned. I don't want either one to become unavailable because they give traders great versatility.

The extra upward pressure created by margin buying and the extra downward pressure created by shorting cancel each other out in the long run but in the short run help produce tremendous volatility both up and down. That benefits traders, especially those who play both sides.

And finally, any company that produces consistently growing earnings and revenues will ALWAYS eventually overcome any shorts. Try telling this to a bunch of folks on Yahoo! who always blame shorts no matter what, even if their pet company loses millions per quarter.

My opinions only and good luck!
Hadrian
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