[rsync]

"Leverage can be used for good, and sometimes it's used irresponsibly. As this thread's article demonstrates, short selling also creates systemic risk."

What critics of short selling are often unaware of is the role that short holdings play in dampening a market crash.

The act of unwinding your short position involves buying the stock which means that for every tick downward in stock price there is new upward pressure on the price as buyers step in to cover their short position.

Were these constant, ready buyers not extant, market downturns can turn into precipitous crashes very quickly.

[pdkl95]

I should have used more specific language; I'm not trying to argue that short selling is "bad". The benefits - such as dampening a crashing market - are large enough to accommodate some risk. I'm primarily addressing the claim that, "There's absolutely nothing wrong with short selling". Ignoring small, acceptable risks is normalizing deviance[1].

[1] https://www.youtube.com/watch?v=PGLYEDpNu60