Hacker News new | ask | show | jobs
by leadingthenet 3383 days ago
Why? Genuine question.
1 comments

Short selling is significantly more dangerous than other forms of investing, because it requires borrowing the securities that you then immediately sell. You eventually have to return those securities to the person you borrowed them from, so that requires a purchase in the future. If the price of the security goes up, you don't just lose your money, you take on a debt that you must repay.

The worst thing that can happen if you buy a security is that it will become worthless, thus you lose all the money you put in. The worst thing that can happen if you use any form of debt to leverage your investments is that you get wiped out completely because you end up owing more money than you can possibly pay back.

See: Help! My short position got crushed, and now I owe E-Trade $106,445.56

http://www.marketwatch.com/story/help-my-short-position-got-...

What you're talking about is a "naked short", which is of course very risky. No Bitcoin exchange allows for this. In fact, most exchanges don't allow for shorts or any sort of leverage.

While what you're saying may be true in some context, it doesn't apply here.