The Truth About

[janice shell]

If I were King, I would outlaw short selling in any form. Economically it is a total waste of venture capital. IMO the only reason shortselling exists is so that pro traders and the securities industry can profit from the investments of the average investor.

Not so! Shortselling is an integral and very important part of the markets. It always will be. It promotes efficiency in pricing. If it weren't for shorts, ALL stocks--not just pennies, which are very expensive to short--would be dangerously volatile, with frequent outta control spikes.

A great many retail investors short stocks, either as a hedge or as a straightforward attempt to make a profit. Since "true" shortselling requires margin and, if you're initially unlucky, maintenance, I think most prefer to do their shorting by buying puts. But it's the same thing in the end.