News for hackers. Stuff that matters.

A comment on Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation. Parent comment

Re:Counterfeiting Stock – Explaining illegal naked shorting ... by dcolkitt on Monday February 01, 2021 @10:25AM (#25989427)
That's the point. Short selling acts as a tax on irrational investors. That's why short selling is linked to a reduction in speculative[1], corporate fraud[2], and price inefficiency[3]. It makes the market more rational, by driving irrational investors out of the market.

[1]https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.... [2]https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12369 [3]https://academic.oup.com/rfs/article-abstract/26/2/287/15819...

[ Parent | on HN ]
Re:Counterfeiting Stock – Explaining illegal naked shorting ... by dhruvdh on Monday February 01, 2021 @12:04PM (#25990496)
Again, you are living in a textbook. See the real-world effects of short selling on TSLA, and all the irrational investors that made bank on the same.

If irrational investors are being driven out why is there an evident trend of increasingly irrational stock prices over time?

[ Parent | on HN ]