Season 1 · Episode 39
Should short selling be banned?
Debunking Economics - the podcast · Steve Keen & Phil Dobbie
April 24, 201717m 5s
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Show Notes
A big chunk of the trades that happen in shares are sold short. In other words, the trader takes a punt that the price will go down. In effect you sell something that you don’t own yet – like shares in the company – and you sell it to some mug who buys it off you at today’s price. Then when the price has gone down, you buy it at the lower price and deliver on your promise. Phil Dobbie asks Steve Keen whether short selling is destructive, or is it a useful balance that keeps share trading in check?
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