Why is stock shorting allowed?

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I understand what the actual process of doing so is, but for example I’ve seen people who work on wall street try to reassure us that it’s a normal and healthy part of wall street. I don’t understand how it’s allowed, or why any company would allow it to happen to their shares?

In: Economics

8 Answers

Anonymous 0 Comments

> why any company would allow it to happen to their shares?

* Once a company sells shares on the market…. they aren’t *their* shares anymore.
* They don’t get to control what people do with the shares once they are sold.
* It’s allowed because the government hasn’t decided it’s not allowed yet.
* Shorting in small amounts doesn’t really do any damage.

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