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Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: Hadrian who wrote (17714)	9/21/2001 11:29:35 PM
From: Mathemagician	Respond to of 208838

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. A case can be made that short selling actually decreases volatility. This is because most short sales are made during a rally, which has the effect of dampening that rally. Also, most covering is done as the share price drops, which results in a smaller drop. M