April 8, 2009
As the chief trader for the Larrison Family Trust, I have traded options and equities for the past thirty years. I've never lost a dime selling short, so my comments are not the machinations of a bitter trader. I want to say that no amount of silver-tongued rhetoric nor fancy logic can help the practice of short-selling pass the smell test. Short-selling is morally reprehensible when mere citizens are allowed-- even encouraged-- to invest where professionals trade. I've watched even wonderful companies, whose stock is widely held by unsophisticated investors and pension funds, be systematically attacked by hedgers that drive the share price down, scare the stockholders into selling, only for them to senselessly lose their money to vultures who prey upon them. Moreover, restricting short-selling to covered shares, the up-tick rule, or any other scheme will never work for the same reason one doesn't put the fox in charge of the henhouse. Get rid of this predatory blight upon an otherwise fine system of markets. Prohibit ALL short-selling - period! Let traders trade puts instead of picking the pockets of hard-working and non-professional investors.