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Message:: [QUOTE="desertgem, post: 1211996, member: 15199"]The idea of shorts is also confused. For example with the ETF fund SLV, when one of the "partners " in the trust deposits a basket of physical silver, they can receive corresponding shares of SLV. If they sell the shares to someone for money ( betting the value of silver will decrease and they can buy the share back cheaper later) they are accused of shorting silver, but that is perfectly legal. What is not legal is "naked shorting" where the party doesn't deposit silver, but just takes extra ( not their own) shares and sells them. Some may say this happens, but it would be obvious in an audit IMO. For every 100 shares going long ( buying), someone will have to be going 100 shares short (selling). You can't impose position limits on shorts unless you do on longs also or you will get imbalances. Staying with the sports analogy, a bookie would love to put limits on those backing the favorite and not limit those who are betting against. Since they can't do that, they have to adjust the odds to inhibit betting on the favorite and enticing bets on the under dog. usually it works, sometimes not. Margin calls help the same way for futures.[/QUOTE]