For a mechanism that is designed to drop the price, why is is shorting permitted whilst the price is already dropping? This does not feel like a mechanism for price discovery, rather a way to force the price down, triggering stop losses from people trying to manage risk. If someone truly believes that the price will drop, let them short during the uptick only. Let there be a central database recording shares sold short, to avoid rehypothication and to better identify manipulative practices. Set a limit on how much a stock can be sold short. It should not be possible for people to short a stock into bankruptcy, to avoid having to buy back the stock.
Anonymous-PNS Comment On Regulatory Notice 21-19
For a mechanism that is designed to drop the price, why is is shorting permitted whilst the price is already dropping? This does not feel like a mechanism for price discovery, rather a way to force the price down, triggering stop losses from people trying to manage risk. If someone truly believes that the price will drop, let them short during the uptick only. Let there be a central database recording shares sold short, to avoid rehypothication and to better identify manipulative practices. Set a limit on how much a stock can be sold short. It should not be possible for people to short a stock into bankruptcy, to avoid having to buy back the stock.