: What is the economic benefit to short a stock?

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What’s the purpose that benefits the whole of the economy? I don’t understand it’s purpose other than to bet on a losing stock. Is it purely for hoping a business will fail? Where is the benefit outside of the individual shorting? The idea of shorting a stock seems unmoral and unethical. Basically why is shorting even allowed to be a thing?

In: Economics

20 Answers

Anonymous 0 Comments

There is no “benefit to the economy.”

The benefit (assuming all goes well) arises between the person who owns the stock and the person who shorts it.

It’s more or less just gambling on the value of the shares. If you win, you get a big payday and the owner of the shares gets a cut of it.

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