West Loop Financial LLCShorting’s Costly Complexities – West Loop Financial LLC https://www.westloopfinancial.com Evolutionize Site Wed, 19 Aug 2020 20:50:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Shorting’s Costly Complexities https://www.westloopfinancial.com/2015/01/19/shortings-costly-complexities/ https://www.westloopfinancial.com/2015/01/19/shortings-costly-complexities/#respond Mon, 19 Jan 2015 09:00:41 +0000 http://evolvemypractice.com/?p=1626 The important economic role played by short-sellers has received increasing academic attention in recent years. The research has demonstrated that short-sellers, as a group, are key market intermediaries that improve the informational efficiency of prices, increase market liquidity and, by doing so, help lower overall country-level costs of capital. In addition, temporary short-selling bans have...

The post Shorting’s Costly Complexities appeared first on West Loop Financial LLC.

]]> The important economic role played by short-sellers has received increasing academic attention in recent years. The research has demonstrated that short-sellers, as a group, are key market intermediaries that improve the informational efficiency of prices, increase market liquidity and, by doing so, help lower overall country-level costs of capital.

In addition, temporary short-selling bans have been discovered to impede pricing efficiency. Without short-sellers, equity prices can become overvalued because only the optimists would be expressing their opinions on valuations.

The research has also found that, even in the presence of short-sellers, anomalies (mispricings) continue to exist because stocks can remain overvalued. Academic research has tried to explain why these anomalies continue to persist.

Read the rest of the article on ETF.com.

The post Shorting’s Costly Complexities appeared first on West Loop Financial LLC.

]]> https://www.westloopfinancial.com/2015/01/19/shortings-costly-complexities/feed/ 0