Why allow shorting of the stock you hold?

Discussion in 'WSB/Stock Market' started by RSS Feed, Apr 3, 2024.

  1. RSS Feed

    RSS Feed Member

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    Maybe a dumb question but as I understand it, shorting a stock means that you borrow a stock from a broker (this could be your stock you hold on this broker) and immediately sell it, so you can buy it back later when it dropped and give it back.

    Okay, but why would any investor who holds said stock and is therefore long, allow his shares to be shorted if it results in a negative price trend which you are obviously not interested in as a long?

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