Agreed, and I wish it were EASIER to short companies. It would encourage the breakup of underperformers by pressing down on stocks, which desperately needs to happen more often in compensation for the overall market surge resulting from Boomer catchup investments for retirement.
The unfortunate difficulty in shorting a stock, well, I discussed that in my recent book (hint: NOT a commercial -- do NOT even think about buying the book unless you happen to be interested in trading options, ok?).
Trading stock shares in the US is an almost entirely asymmetric process; the system will support your **purchase** of shares in numerous ways, but will -- and does, every day -- attempt quite effectively to prevent your sale of shares, bar those you own outright.
I suppose I'm lucky in some sense...never bought a single share of a dot.com outfit. OTOH, Elan Pharma bought out my shares of Liposome some years ago, and those ELN shares have been up to 40-odd, down to 5, up again to 28, and now (grrr!) back down to 3.5. It's not quite as bad as it sounds, though. I've written almost $18.00 of calls against them, so, on this trade, I'm underwater with some decent little possibility of getting back into the profit column. Nonetheless, still a kwappy trade.
Candidly, gents (I assume you're both gents, apols if this assumption is in error), just now I'm doing 3 things.
1) Establishing ratio-spreads (buy 1 call, say w/a striking price of $11.50, and simultaneously writing (selling) 3 calls with a striking price of $15.00) in January 06 Natural Gas, at a net credit on entry of $1100 or better,
2) buying mineral royalty trust shares, Canadian or American, on sharp dips (PBT (NYSE), for instance, recently dropped intraday to $10.75 -- I wasn't clever enough to get anything near that price, of course, but did buy a bit at $11.48; the dividends are exceptional, and it seems rather unlikely that the price of the underlying minerals/resources will crash before year-end, so I can cheerfully anticipate the 0.8/1.2% per month -- not a typo, btw, per month dividend), and
3) shorting FNM and FRD, and possibly other quasi-government ''lending'' outfits (read: organised subsidy outfits -- gov't always pushes this sort of thing far too far, and it'll get ugly when the chickens come home to roost) on any good bounce in their respective share prices. Feel quite free not to accept my word on this, but Fannie, especially, right this very minute, is even MORE highly leveraged than was LTCM when that group of traders collapsed in 1998.
The bailout for Fannie will beggar description. Come on down, Mr. and Mrs. Taxpayer.
It will be sort of ruefully amusing to watch the process...assuming (very reasonably) that the Regress will NOT rein in Fannie and Freddie from doing the derivatives version of ''Disco Inferno''.
Well, I suppose that's why we all get out of bed in the morning; to see what'll happen, right?
Good trading and FReegards to you both!