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A comment on Young Koreans are echoing r/WallStreetBets in their war against short sellers. Parent comment

Re:Young Koreans are echoing r/WallStreetBets in their war a... by popcorncowboy on Wednesday March 03, 2021 @12:01PM (#26331183)
You're right, but shorts don't _cause_ a stock to be low (in normal/retail circumstances). They're a bet on a stock being overvalued to begin with.

- yes, shorting involves selling stock which nominally pushes prices lower, etc etc hat tip illegal S&D

[ Parent | on HN ]
Re:Young Koreans are echoing r/WallStreetBets in their war a... by thebean11 on Wednesday March 03, 2021 @12:08PM (#26331292)
I kinda disagree, shorting messes with the supply/demand curve by "creating" more shares.

If person A has a share, then B borrows it to short and sells it to person C, now both A and C are effectively holding the same share. Put another way, two people have had their demands met by a single share, increasing supply.

[ Parent | on HN ]
Re:Young Koreans are echoing r/WallStreetBets in their war a... by popcorncowboy on Friday March 05, 2021 @03:38AM (#26354411)
Only if A sells naked shorts, which is illegal. In ordinary circumstances A and C do not and cannot hold the same share. A only holds a claim against B to return the same number of shares as were borrowed.
[ Parent | on HN ]
Re:Young Koreans are echoing r/WallStreetBets in their war a... by thebean11 on Friday March 05, 2021 @04:09PM (#26362138)
No that's not the case. The scenario I described actually happens, and is not naked shorting. That's how GME got >100% short interest.

For all you know, you could be the "A" in this situation. Many brokers will lend out your shares, but from your perspective you are just long.

[ Parent | on HN ]