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A hypothetical question for the finance people...

 
2XSecretAgent
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User ID: 134741
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01/16/2008 10:44 AM
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A hypothetical question for the finance people...
Watching all these threads focusing on the current and potential for the drop in stocks... It would seem a good time to go short on a lot of stocks.

If lots of people do this...

1. Could it create greater financial losses for companies, leading to greater drops in stock - and this becoming a self perpetuating cycle of stock plunges?

2. Is it possible that if lots of people do this - the money won't even be there to give the people the profit they make off of going short on stock?
Let's agree to respect each others views, no matter how wrong yours may be.
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There are no stupid questions, but there are a LOT of inquisitive idiots.
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2XSecretAgent  (OP)

User ID: 134741
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01/16/2008 10:49 AM
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Re: A hypothetical question for the finance people...
Come on all you stock junkies!

Don't make me pin this to get your attention~
Let's agree to respect each others views, no matter how wrong yours may be.
-------
There are no stupid questions, but there are a LOT of inquisitive idiots.
-------

Contact: [email protected]
Omega

User ID: 356403
United States
01/16/2008 10:58 AM
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Re: A hypothetical question for the finance people...
I don't short stocks, instead, I am long ammo, so I don't know. :>)

Veracity, you wanna take this one on bro????
Handguns are a skill; shotguns an art; rifles a science.
_____________________________________
Democracy is two wolves and a sheep voting on whats for dinner.

Disarmament is the precursor to Genocide.

Better to take action now rather than chances later. Your choice.
Anonymous Coward
User ID: 579
United Kingdom
01/16/2008 11:00 AM
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Re: A hypothetical question for the finance people...
depends if you are referring to normal shorting or "naked" shorting which is technically illegal.
2XSecretAgent  (OP)

User ID: 134741
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01/16/2008 11:00 AM
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Re: A hypothetical question for the finance people...
I don't short stocks, instead, I am long ammo, so I don't know. :>)

Veracity, you wanna take this one on bro????
 Quoting: Omega


I know it's all funny money anyway - right?
Let's agree to respect each others views, no matter how wrong yours may be.
-------
There are no stupid questions, but there are a LOT of inquisitive idiots.
-------

Contact: [email protected]
2XSecretAgent  (OP)

User ID: 134741
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01/16/2008 11:01 AM
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Re: A hypothetical question for the finance people...
depends if you are referring to normal shorting or "naked" shorting which is technically illegal.
 Quoting: Anonymous Coward 579

Can you explain what you mean by that?
Let's agree to respect each others views, no matter how wrong yours may be.
-------
There are no stupid questions, but there are a LOT of inquisitive idiots.
-------

Contact: [email protected]
Omega

User ID: 356403
United States
01/16/2008 11:03 AM
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Re: A hypothetical question for the finance people...
I don't short stocks, instead, I am long ammo, so I don't know. :>)

Veracity, you wanna take this one on bro????


I know it's all funny money anyway - right?
 Quoting: 2XSecretAgent


What I do know is the major players on wall street monitor short positions and try and *stop them out* thru various illegal activities, like start a rumor, collude to buy large long positions to stop them out, shit like that.

As far as the possibility of not paying up-sure-the whole system is corrupt.

But as for the real technicalities of shorting, not up on it cuz frankly I don't have the balls to do it.
Handguns are a skill; shotguns an art; rifles a science.
_____________________________________
Democracy is two wolves and a sheep voting on whats for dinner.

Disarmament is the precursor to Genocide.

Better to take action now rather than chances later. Your choice.
Anonymous Coward
User ID: 579
United Kingdom
01/16/2008 11:06 AM
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Re: A hypothetical question for the finance people...
[link to en.wikipedia.org]

this should explain it.

i would never put a penny into the stock market because of crap like this.

Better off backing a horse or the fights IMHO.
Anonymous Coward
User ID: 260371
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01/16/2008 11:15 AM
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Re: A hypothetical question for the finance people...
depends if you are referring to normal shorting or "naked" shorting which is technically illegal.

Can you explain what you mean by that?
 Quoting: 2XSecretAgent

normally to short a stock you must borrow shares..(to prevent shorting of more stock than actually exists)

naked shorting ignores the borrowing rule.

shorting can lead to a self-fulfilling decline in small sparsely traded issues...a bear raid so to speak.

The SEC lifted the uptick rule last summer whish can also create a cascading effect.

As far as shorting now..the easy money has been made.
2XSecretAgent  (OP)

User ID: 134741
United States
01/16/2008 01:04 PM
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Re: A hypothetical question for the finance people...
Ok - it seems like my hypothetical scenarios are possible and that's why some regulations have been put in place to regulate short transactions.

It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.
Let's agree to respect each others views, no matter how wrong yours may be.
-------
There are no stupid questions, but there are a LOT of inquisitive idiots.
-------

Contact: [email protected]
Anonymous Coward
User ID: 260371
United States
01/16/2008 01:07 PM
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Re: A hypothetical question for the finance people...
Ok - it seems like my hypothetical scenarios are possible and that's why some regulations have been put in place to regulate short transactions.

It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.
 Quoting: 2XSecretAgent

actually one of the more important regulations was lifted..the uptick rule...last summer.

I personally do not short...but shorting is a benefit to the markets as it provides greater transperency into the markets...shorts are usually right on a stock cause they really do their homework as their losses are not capped.
Anonymous Coward
User ID: 331956
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01/16/2008 01:20 PM
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Re: A hypothetical question for the finance people...
put on tight stops...my options have done well
Omega

User ID: 340280
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01/16/2008 02:04 PM
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Re: A hypothetical question for the finance people...
It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.
 Quoting: 2XSecretAgent



I am sorry 2x, I do not understand your position here.

Investing in stocks is a bet, are you saying that we should only be allowed to bet a stock will go up????
Handguns are a skill; shotguns an art; rifles a science.
_____________________________________
Democracy is two wolves and a sheep voting on whats for dinner.

Disarmament is the precursor to Genocide.

Better to take action now rather than chances later. Your choice.
mathetes

User ID: 327572
United States
01/16/2008 02:07 PM
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Re: A hypothetical question for the finance people...
It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.



I am sorry 2x, I do not understand your position here.

Investing in stocks is a bet, are you saying that we should only be allowed to bet a stock will go up????
 Quoting: Omega

The Fed already does this for the big players! LOL
For I would not, brethren, that ye should be ignorant of this mystery, lest ye should be wise in your own conceits; that blindness in part is happened to Israel, until the fulness of the Gentiles be come in.
2XSecretAgent  (OP)

User ID: 134741
United States
01/16/2008 03:45 PM
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Re: A hypothetical question for the finance people...
It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.



I am sorry 2x, I do not understand your position here.

Investing in stocks is a bet, are you saying that we should only be allowed to bet a stock will go up????
 Quoting: Omega


No... and I'm not at all a stock guru as you can tell by my questions here. But it seems to me that there is a greater potential for abuse and ability to create a negative impact on the individual business as well as overall stock market with this practice.

You want to hurt someone in business? Buy a bunch of their stocks short and do something to hurt their value - and you make money and the other guy suffers a double whammy.
Let's agree to respect each others views, no matter how wrong yours may be.
-------
There are no stupid questions, but there are a LOT of inquisitive idiots.
-------

Contact: [email protected]
Omega

User ID: 340280
United States
01/16/2008 03:58 PM
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Re: A hypothetical question for the finance people...
It just seems like a really bad option to allow people to profit off of stocks going down in value - which in turn can cause the value to decrease.



I am sorry 2x, I do not understand your position here.

Investing in stocks is a bet, are you saying that we should only be allowed to bet a stock will go up????


No... and I'm not at all a stock guru as you can tell by my questions here. But it seems to me that there is a greater potential for abuse and ability to create a negative impact on the individual business as well as overall stock market with this practice.

You want to hurt someone in business? Buy a bunch of their stocks short and do something to hurt their value - and you make money and the other guy suffers a double whammy.
 Quoting: 2XSecretAgent


Sure,a business that lie's on earnings (most of them, lol) , makes shitty products, offers shitty services, don't meet stockholder expectations, etc, et al, DESERVE to get their asses shorted.

It's a casino, and as such, you place your bets, for or against, and take your chances.

Same as it always was.
Handguns are a skill; shotguns an art; rifles a science.
_____________________________________
Democracy is two wolves and a sheep voting on whats for dinner.

Disarmament is the precursor to Genocide.

Better to take action now rather than chances later. Your choice.





GLP