Post
Topic
Board Speculation
Re: On short selling
by
deisik
on 04/02/2019, 04:35:40 UTC
Shorting a currency does not always result in a drop in it's price, if it did everyone would be shorting and getting profit off their investments. I believe short term traders predict a possible drop in the price and take advantage of it rather than causing the drop by selling their holdings

It all eventually comes down to the balance of supply and demand

And short-selling adds to supply (i.e. someone selling, as the term itself suggests), so if it doesn't result in a price drop, it just means that the amount sold is either too small to make a dent in the Bid side of the orderbook or it is offset by someone else's buy orders eating into the Ask side of the orderbook. If no one is actively buying (beyond matching the selling orders, obviously), selling always leads to a price drop in the end. There is simply no other way about it, and it doesn't matter whether it is short selling or long selling, so to speak