I have a related question. In a situation when an industry (say, financi...

Suggestion by Azolotkov on 2008-03-25 02:46:51

I have a related question. In a situation when an industry (say, financial services) is doing bad as a whole, potentially a bunch of investors could start shorting financial services stock and thus make money. What sets the limit to how much stock they can short? It sounds like an endless opportunity to make money when the economy goes bad. To answer my own question, I'm guessing that the broker from who you're "borrowing" the stock that you think will go down in price, has only a limited supply of said stock, and thus the money making opportunity quickly dries up. Comments and thoughts appreciated.

Add comments or discussion related to this suggestion here.

Template:Short selling paradox A share sometimes entitles its holder to some rights when it comes to the company at hand. What happens to this right when a share is sold short? Neither the borrower nor the lender of the share actually possess it. So if there is a shareholders' meeting, who comes with the share being sold short? And did the lender of the share approve of being the lender, and knowingly gave up his/her right entitled by the share?

Wikinvest © 2006, 2007, 2008, 2009. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.