Re:A year on, GameStop champion Roaring Kitty is quiet, yet ...
by omgwtfbyobbq on Wednesday February 02, 2022 @12:35PM
(#30180868)
I think it's more that by law, long positions require disclosures, while short positions can be, and mostly are, opaque.
The more opaque information discovery is in general, the less accurate markets are in the short term.
Re:A year on, GameStop champion Roaring Kitty is quiet, yet ...
by clownbaby on Wednesday February 02, 2022 @12:35PM
(#30180876)
The OP you are replying to here is obviously talking about shorting MORE than 100% of the float, which indeed should not be possible.
Re:A year on, GameStop champion Roaring Kitty is quiet, yet ...
by greenshackle2 on Wednesday February 02, 2022 @12:51PM
(#30181133)
You need to stop getting your information from wsb conspiracy theorists. Here's an example of perfectly possible 200% float short:
Acme Corp has exactly 1 share of float, owned by Alice.
Bob borrows the share from Alice and sells to Charlie.
Diana borrows the share from Charlie and sells it to Eve.
Bob and Diana are each short 1 share for a total of 2. Total short position is 200% of float.
The better indicator of sketchy activity is FTDs, which may indicate that people are selling short without a locate.
Actually, it's the other way round: you can only have accurate price discovery if people can take both long (buy) and short positions (short sell). If shorting is restricted, price discovery is much less likely, since only current owners of the shares can sell them. That's like only allowing current owners of the shares to buy more of them.