As investors in stock markets around the world look for the next sector to suffer from the global economic slowdown, there is speculation from those in the market that casino stocks are being “sold short” in the hope that investors will be able to buy the shares back at lower levels. So what is “short selling”?
Short selling is a term used when investors sell shares which they do not own, in the hope that they will be able to buy them back at lower levels before they have to pay for them (banking a profit in the process). This practice has attracted much controversy over the years as it can often occur prior to rumours and counter rumours “spooking” investors.
The negative news which is being released with the recent raft of casino company results is not doing the sector much good at the moment, but many forget where the sector came from. The last few years have been very much a non-stop period of growth, a time when new markets such as Macau have sprung up from nowhere and even Las Vegas has had its crown taken.
After a period of sustained growth maybe a period of consolidation would do the casino sector no harm?
As investors in stock markets around the world look for the next sector to suffer from the global economic slowdown, there is speculation from those in the market that casino stocks are being “sold short” in the hope that investors will be able to buy the shares back at lower levels. So what is “short selling”?