āHard luck hahaā was maybe too sarcastic What I meant was that new investors or traders will have to learn to be responsible for their own actions. There is no investor in the world who hasnāt suffered a bigger loss at some point. They need to be aware of it.
About the fees: say that fixed monthly fee increases from Ā£10 to Ā£20 for short sellers (could go even higher but thatās not what I want to encourage ) . And say that per trade fee for US stocks remains free. It is still super attractive for daytraders! On many platforms trades cost about $5. If a daytrader makes 50 trades per month, thatās $250 per month. With Feetrade it is just Ā£20 per month and thatās all.
Some American brokers are starting to allow a feature whereby accounts can lend their shares to short-sellers at a certain interest rate - a āStock Yield Enhancement Programā. I think this would definitely be an interesting feature for investors using Freetrade and a novel way for long-term investors to earn a higher yield.
I believe securities lending was mentioned as a potential future revenue stream in the series B investor deck. Havenāt seen the deck, but it came up in the Series B mega thread
When you buy a stock youāre buying it from someone who doesnāt share your opinion on the value. They might think itās about to drop hence their motivation to sell, this could be seen as shorting position. Where it goes wrong is when you get short campaigns being waged with false information or naked shorting - these should regulated / controlled with disclosed short positions over a certain size.
No one will report anything unless the person reporting it can get financial compensation for their efforts. Short selling is a way of getting that compensation. Everyone has bills to pay
Abusive behaviours like fraud can be found in both sides, the short side and the long side. Itās not an exclusive intrinsic characteristic of short sellers. There are good and bad behaviours on both sides.
Iāve shown you one example of uncovered fraud (Enron) and profit taking by uncovering and exposing it via short selling supported by DD
Iāve shown you a second example with industry malpractice being unveiled and exposed by investors who made their Due Diligence, placed their shorts and profited
Another example of a short seller shorting. Just because their targets are rubbish/fraudulent companies on these occasions doesnāt show any āgood behaviourā. Theyāre out to make a buck first and foremost.
Making a profit when denouncing it is not, in my view a bad behaviour per se. Quite the opposite. I think itās good behaviour. But hey, generally speaking, I take personal gratification by bullying bullies, and trolling trolls, so I guess that makes me biased
Please donāt confuse short selling with the abusive behaviours of some short sellers
So we fix the government side. We donāt say short sellers are doing good when they short a fraudulent company and bad when shorting a non fraudulent one. Confusing outcome with intent here. No good behaviour shown.
What I meant was that new investors or traders will have to learn to be responsible for their own actions. There is no investor in the world who hasnāt suffered a bigger loss at some point. They need to be aware of it.
) . And say that per trade fee for US stocks remains free. It is still super attractive for daytraders! On many platforms trades cost about $5. If a daytrader makes 50 trades per month, thatās $250 per month. With Feetrade it is just Ā£20 per month and thatās all.
