From: Jaemerick1 [jaemerick1@cox.net] |
The rationale for short selling is to provide the market with liquidity. By no means is liquidity assured simply because short selling exists. If anything short selling lends itself to abusive trading practices because it is a discretionary act of a vested interest whose interests in running a fair and orderly marketplace are in conflict with the market pricing stemming from a short sell. To correct this problem, short selling should be viewed as a tradable commodity, just as future prices are on the options exchange, and a market established to prevent the short selling power from being concentrated in the hands of the specialist or market maker. Along with the idea of cleaning up short selling activities in the market place, the SEC should recognize and require all stock that is traded on any of the public exchanges be required to meet some minimal capitilization/sales requirement so that millions of shares cannot be issued solely for the purpose of pump and dump schemes. Also, any stock that is publicly traded should be required to provide the same level of financial reporting as what is expected of a blue chip stock. |