[Permit]

Short selling Bitcoins would be an incredibly risky move on your part. There are no financial regulations in place to prevent market manipulation. You used to be able to short sell on Bitcoinica and there were some really questionable margin calls that took place.

[habosa]

Can you elaborate? I'm not too familiar with the bitcoin market, just viewing it from a normal (amateur) financial perspective.

[jfoutz]

Read up on the hunt brothers and the silver markets. Essentially, they would buy up contracts with brokers to buy 1lb of silver on july 1st for $10 (or whatever the specifics happen to be). Then, in June they bought all the silver, like some ridiculously huge fraction of all the silver in the world. When it comes time for that broker to find that pound of silver he owes the hunt brothers, the hunt brothers get to set the price, because they're the only ones with silver. So this broker, he has to come up with how ever much the Hunt brothers demand, he is really over a barrel.

Just one memorable example of market manipulation and unlimited exposure.

[nikcub]

if you didn't understand what he said then you shouldn't be short selling