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Old 03-17-2020, 11:08 AM   #21
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Don't merchants that use a drop shipping model essentially do this? Also, it seems like it would be possible for just about any commodity. The farmer sells the rights to his crop and someone buys that right. Then, what about a continual supply chain operation - like TP (to use a current topic ). Seems likely that the supplier would be selling all the time with the expectation that new stock is going to come in.

Not trying to argue, but it would seem odd if it was just stocks and bonds that have this characteristic. Doesn't seem likely.
Then name some legitimate examples. Drop shipping is a whole different thing... the drop shipper accepts the order and then simultaneously buys the product and sells it to their customer. With short sales, there is no simultaneous buy, just the sale with an IOU x shares.

Name me one other investment other than short sales where the investor makes money on failure. It seems to me that it would be a better world and economy if investors invested to benefit from success rather than failure and we prohibit short sales.

I don't have an issue with the sale of a legal right that is an intangible asset... like a contractual right that you own or even plants in the ground that you own... but selling a stock that you don't own or have any legal rights to doesn't fit there either.
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Old 03-17-2020, 11:25 AM   #22
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I don't have an issue with the sale of a legal right that is an intangible asset... like a contractual right that you own or even plants in the ground that you own... but selling a stock that you don't own or have any legal rights to doesn't fit there either.
I was going to mention grain futures (selling plants in the ground), a product (the resulting grain) you don't own (yet).

But in any case, short sellers do need to cover that sale with the amount required to buy it back. And short sellers buy back on dips, which could actually help to stabilize markets.

I dunno, but I kinda think making changes to the market in the middle of things would be disruptive. If short selling needs regulatory changes, then maybe wait until the dust settles?

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Old 03-19-2020, 05:24 PM   #23
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I agree it would be best to wait... but the whole idea of short selling seems stupid to me... not investing but more wagering... we don't need it and it is counterproductive IMO. From a publicy policy perspective I think we would want to create economic incentive that reward success but not allow economi incentives that reward failure.

With grain futures you have an asset... your right to what the plant that you own produces.
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