Why Is Short Selling Legal? [conversation update]

 https://youtu.be/djt9mPq_Hck

@tonyotag "a targeted percentage of outstanding shares does become more philosophical as it is political" I don't understand what you're saying.

tonyotag replies: 

​ @seneca983  "more philosophical as it is political" means that government policy for what a corporation can do with its shares and how the stock traders trade the stock becomes more of a political philosophy that can develop into political action (a law.) 

"a targeted percentage" is just jargon for a set percentage of outstanding (tradeable) shares that the company's shares can be traded for short selling purposes. 

For example: if the government policy was 80% of outstanding shares can be shorted then if a company had 100,000 outstanding shares in the market then 80,000 shares (maximum) can be of short interest at any time 

This policy ensures there is a base price to the shares instead of being shorted out of existence (over 100% of shares outstanding, that is what happened to GameStop. GameStop got lucky when buyers came and bought the stock out of the huge short interest that was depressing the stock.)