U.S. market sell-off brings short sellers $344 bln profit

Reuters ^ | Sinéad Carew

[Roman_War_Criminal]

Cue in the haters to your post.

When the DOW was over 28,000 was when everybody should have shorted it.

[grobdriver]

I will understand everything you say, but we're not communicating.

The scope of our thinking is very different.

[wildbill]

Short sellers also lose when unexpected events occur. I trade currencies on the fX market and had a lot of short trades on various British Pound currency pairs. I expected the Brits to screw up as usual but when the momentous day occurred, they scheduled an election and the Pound rallied up 2000 points before I could get out of my trades.

Then this month my favorite currency, the US dollar took another bath because of the Corona crash before rallying
In both cases I risked a lot and lost a lot more in real dollars intended for my mother’s nursing home and my retirement.

I’m not asking for sympathy, but short sellers take a risk as well, based on their best estimate of the economic conditions at the time of the trade and can get caught because of events that capriciously occur.

Seems like no one realizes that a short seller is just taking the other side of a long trade. One trade can’t exist without the other side. Neither side is morally bankrupt-—only financially bankrupt. :-)

[ConservativeInPA]

Yes, perhaps my thinking is simplistic. I exclude from my thinking a lot of variables that I cannot control and I know that I cannot predict. I focus on things I can profit. I avoid fear and greed when trading, as best I can, but it drives markets. It is a part of nature and man. I just don’t let it affect my decision making process. This means leaving emotion behind. Fear drove this market down. The people who were long and were scared, sold and lost. If they didn’t sell, had no fear, and stayed long, they would see their investments recover. The market will bounce back. The people who had greed, went short, and won. These are the evil people you speak of. But guess what, their greedy nature will bite them in the ass another day when the market goes up and they are short. However, in the last two weeks, the greedy shorters provided a valuable service to the fearful long players. That service was someone was there to buy on the way down. If no one was buying, no one could sell. This has been happening since cavemen traded spears around a fire. My primary point is previous posts is that conservative traders cover positions. This requires going short. All too many people complain about shorting and its evils. To me, it is simply a tool, and necessary tool to conservatively trade. It means profits are limited, not amplified, but that is the cost of insurance. So I hope people do not call for the end of short trading. Too much of that going on these days.