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jefe_ | 5 years ago

I've perused WSB for a while, but watching GameStop this morning, I'm worried this recent 'short squeeze initiative' opens the door for various retail trading restrictions. Whether phase-out of commission-free trading, per-trade taxes, restrictions on options trading, tightening of pattern day trading restrictions, it seems something is coming. It's tough to envision a circumstance where retail trading is permitted to interfere with such a fundamental activity as short-selling. It's like a DDoS attack on the stock market, and I expect the defenses to be similar: additional vetting, limits, circuit breakers (which already exist but could be modified).

I really hope I'm wrong because their ability to make GameStop, Nokia, and BlackBerry trend in 2021 is genuinely hilarious.

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cwhiz|5 years ago

Short selling is not a fundamental activity. Short selling should be the thing that is illegal. None of this nonsense would exist if it weren’t for the absurd nonsense that is borrowing a stock, selling it, waiting for the price to drop, buying a stock, and giving it back. Short selling is absurd. All options trading should be banned by the SEC.

jeffbee|5 years ago

What you are suggesting is a one-sided market where prices can only go up and there is no restoring force. That's dumb.

What's worth knowing is that immoral conspiracies among short sellers are incredibly rare. I challenge you to find a documented case. By contrast, there have been many, many pump-and-dump sell-side scams, and without the short side there would be many more.