Caudate:
See the quote below from my post earlier today. My understanding is that the HFT boys close their positions every day so that they never have to report short trading. Their method then relies on selling by "fundamental investors", that is, you and me, who sell in despair when they see the share price dropping. It would seem that they could be stopped if the fundamental investors could no longer be panicked into selling but I may have misunderstood the situation. It certainly appears that the regulators of exchanges like the TSX have allowed their businesses to be turned into casinos rather than true exchanges based on traditional company performance and evaluation. It would seem that that realization has resulted in the flight of retail investors out of equities like AUM.
Here is the quote I mentioned above:
"By being able to sell short stock without tagging it as such they can intercept money moving into the stock from fundamental investors. Obviously to profit they need to unwind the short position. This is just a matter of waiting for the inflow of new money to end, and then pounding the bid side of the order books with further short sale orders until the failed rally triggers a cascade of selling by despairing long shareholders, which allows the day trader's short positions to be covered the same day."
