What is packaged as a positive function
Price discovery and bubble prevention: When stock prices are overvalued relative to a company's true value, short selling adjusts stock prices to appropriate levels and prevents asset bubbles from forming.
Market liquidity provision: By lending and selling stocks, it increases trading volume and helps activate trading in the entire stock market.
Risk hedging and profit opportunities in declining markets: When the value of stocks held by investors falls, short selling can offset (hedge) losses, and it provides investment opportunities even in declining markets.
Market efficiency and transparency improvement: By ensuring negative information is quickly reflected in prices, it reduces information asymmetry in the entire market and increases efficiency.
That's what they say... but what actually happens is that large volumes shake the index line to trigger crashes, and based on this
"making money off other people's misfortune" is all I can see.
From the perspective of someone actually doing short selling, the company needs to become worthless to make money, so they produce the company's weaknesses and negative points like spreading rumors, stimulating anxiety...
No matter how I look at it, it doesn't look like a fair system...
