william the wie
Gold Member
- Nov 18, 2009
- 16,667
- 2,402
- 280
Let's keep this simple a downturn happens when more people try to sell than try to buy.
The only way short sellers and buyers of puts can make a profit is by buying the underlying issue and delivering it to the owner or writer respectively. This is expensive and provides a floor on the decline.
The only time you should ever even consider shorting is when nobody else is doing so. So, at the moment even though valuations are mostly insane a serious downturn cannot happen because of too many short sellers and put buyers in the market.
The only way short sellers and buyers of puts can make a profit is by buying the underlying issue and delivering it to the owner or writer respectively. This is expensive and provides a floor on the decline.
The only time you should ever even consider shorting is when nobody else is doing so. So, at the moment even though valuations are mostly insane a serious downturn cannot happen because of too many short sellers and put buyers in the market.
