Friday, September 19th, 2008...5:46 am
Under Pressure, SEC Chief Is Moving Against Shorts
Jump to Comments
“If you eliminate short selling, you are saying that the only way you can make money is if a stock goes up,” the chief executive of Lightspeed Professional Trading, Stephen Ehrlich, said. “As a result, companies’ incentives to drive extra profitability might not be there.” Short selling, which is legal, is a useful way to hedge bets and it plays a critical role in allowing the derivatives market to function, Mr. Ehrlich added. It also ensures that stock prices are efficient and accurate, and without it, many stocks would have artificially inflated prices. Enron is often cited as a case where short-sellers detected fraud. more@NYsun
Leave a Reply