@worzel1 Riddle me this. They call it short SELLING because...

@worzel1

Riddle me this.

They call it short SELLING because people sell shares that they don't own today (ie shares that they have borrowed from an a real owner of those shares as naked short sellimg was made illegal) to buy back later at a lower price, ie sell high today, buy low at a later stage and return said shares to owner from who you borrowed the shares.

The acummulated selling which represents the short interest in the company is not ownership of the share register in any sense of the word, the ~6% of accumulated short sold shares in RSG are really just obligations to buy 6% of the shares on the registry at some later point in time. The owners of those shares are happy to rent them out to the shorters to make money. At the time that the shares are lent both lender and borrower have expectations for which way the share price will move and by how much.

Now if the owners of the stock expected to lose more money through having shares returned to them at a lower price than they expect to make by renting out the shares, why would they do it? Wouldn't they just be better off selling those shares and maybe buying them back later. Clearly the lender of the shares would need to be "long" the stock to consider lending shares to short sellers under the most basic mechanism of the short selling process or else they will have entered the lending arrangement with the expectation of losing money. This is just basic logic. This would actually imply that 100% of the register is long and holding unless the owners of the lent stock can actually extract more rent than the shorters can make by successfully short selling the stock, which seems unlikely or involving more complicated mechanics around the counter party arrangements of lending out the stock. Esh