May 5, 2009
If you want to buy more shares of a company than the number of shares outstanding, you can't. All you can do is buy call options. In the same manner, you should not be able to short more shares of a company than the number of shares outstanding. You would be free however to buy put options. While there seems to be no workable way to limit the shorts of a company's stock to the number of shares outstanding, you can limit them to covered shorts.
In this manner, both the buyers and short sellers of a company's stock would be bound by similar constraints, which in turn would lead to a more level playing field.
In the end, a morer level playing field seems to be best solution.