Oct. 31, 2022
October 31, 2022 Information of all shapes and sizes regarding short sales should be made public. Concealing information with respect to short sales allows for institutions to quietly bet against a security or asset. Making this information public is vital to the overall health and fairness of the United States' markets. Without publicizing this data it allows institutions to willingly manipulate prices of underlying assets in their favor. Without this information be public, market makers are allowed to take on massive short positions which can unjustly drive a security's price downwards. Furthermore, it allows these market makers to take these positions and worry about delivering later once the price has gone down. This is such an obvious conflict of interest because it allows market makers both the ability to sell a security which they do not own in an attempt to make the asset go down in price, and only worry about delivering the security once the price has gone down. Furthermore, it allows them to take massive short positions, artificially lower the price, wait for retail to sell into said short positions (thus reducing their obligations), and then cover only once their positions have gone in the money. Requiring prompt and complete reporting of short positions will prevent market makers from engaging in such damaging practices. With this complete short sale information in the hands of the public, retail investors, regulators, and other funds will be able to see if a market maker (or any other group/individual) holds a large, un-delivered position in a security. If this information is public, investors will be able to make more informed decisions regarding what they choose to do with their securities and may opt to not sell their securities back to a market maker to help reduce said market maker's obligations. Furthermore, it will allow the public to see if any inordinately large short positions have been built in a certain security, which can allow investors and regulators to make more informed decisions about how and where to invest or focus regulation. As it stands currently, institutions can conceal obscenely large short positions for months or even years, while simultaneously spreading erroneous or outright untruthful information regarding a company or stock in an attempt to drive those securities down. While this sort of short and distort tactic is ostensibly illegal, by making all short reporting more stringent and public it would become impossible and very easy to notice. For example if a fund holds a short position and publishes an article that reflects negatively on the company in which they hold a short position, the public would be easily able to recognize the reason behind said article as inherently dishonest. Short sale information of all sorts should be made public as soon as possible (ideally at the moment of said sale) because it will allow for more effective regulation by regulatory bodies and more informed decisions by investors. All of this should also apply to any securities based swaps, derivatives, and/or any other financial instruments that create a synthetic or literal short position for any or all peoples and institutions. There is no reason that this information should not be made public. It is vital for the ongoing health and fairness of our markets.