Are short-sellers the bad guys?

Shorting – selling an asset you don’t own to buy it back at a lower price and pocket the difference – is vilified as cynical speculation. Is it? Simon Wilson reports.

What is short-selling?

Traditional (‘long’) investors look for companies that are undervalued by the market and buy their stock in the hope that their share prices will rise. By contrast, short-selling means finding a security (commonly a stock) that you believe is overvalued and placing a bet that the price will fall.

It is not a form of investment in the normally understood sense, but [...]

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