Great explanation of shorting Just want to add that as scandalous as shorting sounds, it is legal. But what was exposed by GME was that they were doing naked shorting, which is NOT legal.
This means, as best as I can explain it that there are X amount of shares for a stock, total and the shorting is done using those. But the greedy bastards just couldnt get enough so they were basically creating shares that dont exist.
Great explanation of shorting Just want to add that as scandalous as shorting sounds, it is legal. But what was exposed by GME was that they were doing naked shorting, which is NOT legal. This means, as best as I can explain it that there are X amount of shares for a stock, total and the shorting is done using those. But the greedy bastards just couldnt get enough so they were basically creating shares that dont exist.
https://www.investopedia.com/terms/n/nakedshorting.asp