If you trade in the shares of the stock market experts like longs better than shorts. If you are "long" , that means you own stock and that is " good" . If you are short you have sold stock and that is " bad" . At least that's what Wall Street preaches . And why do they want you to believe this and is it true? Let the facts .
Today I hear stories on the financial news and articles in the newspaper that people who "short" driving the market down. They have more stock than they sold themselves and this is due to collapse the market. I've even heard that Congress is trying to pass a law that will not allow people to sell short pass . They blame hedge funds that are allowed to short sell . The fundamental flaw in this concept is like a short sale is to be done on an up tick started. This means that the stock should be up to . A "short " sale No short sale may be made to the pressures of the market down . That is a fatal pin in the balloon lying .
There are reasons why people will make . Selling a stock If you own it you may just need the money now have or if it is you might not want to lose money down to continue the downward trend. There is old saying in the market - "the trend is your friend " . If you have a stock that decreases you may want to sell first and if it falls on you to buy at a lower price it back later. This actually puts a floor under the stock because some time in the futures you MUST buy it. Who does the short circuit does not matter whether it is an individual or a hedge fund . They are actually doing both good for the market two things. They have to buy to support at a lower level , it keeps from going lower the price of a future and they are providing liquidity to the market.
When you buy long you want it to go up so that you can later sell it for profit. When you sell short you 're selling the idea of buying it back after it drops it. Both are driven by the profit motive . How can good and others are bad? It is like saying that there is a good flow and poor electricity.
If CEOs do not want people to their stock short I suggest they look in the mirror to find out who the culprit is . The company CEO is not working properly and that is why the stock decreases. No external person or group , a lower proportion , which is making a good profit to drive . There is a good reason for the price drop .
Buying short not put the market down . The final result of a short sale ( for short) is very positive for the market .
INVESTMENT LETTER 3 month free trial period. Copyright Albert W. Thomas All rights reserved . Author of ? ? If it doesn ? T Up, Don ? ? Buy T! ? ? Former 17 - year exchange member , floor trader and brokerage company owner .
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