Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day.

It's Friday, July 20th, and we're doing the long and short of shorting stocks.

I'm your host Dylan Lewis, and I'm joined on Skype by senior tech specialist

Evan New. Evan what's going on?

I'm going to avail this weekend with some friends. It'll be some fun. As I mentioned last week the kids are out of town so we get an adult trip to the mountains.

Your kid-free weekend. Well enjoy. Before we let you get to that fun weekend with your friends, we have a listener question, and I'm pretty

excited about this one. One of our listeners, Kelly wrote in and Kelly had a

question about shorting stock. Here it is. Can you lay out the case for why

allowing people to short stock is a of a philosophical discussion of the financial markets.

Oh yeah, Shorting is a big part of the market.

Before we get into the actual question itself, why don't we do a quick rundown on, one, the mechanics of Shorting and how it works and two the risks like

huge disclaimer we don't like people shorting stocks generally and I want to emphasize that

as we go through the show because us saying that you can

short is not necessarily an endorsement that you should short although it is a

good thing for the markets. So if you're interested in shorting most people only are on the long side of the

financial markets right if you own shares of a stock you are long in that company

shorts on the other hand borrow shares from the longs

and sell them hoping that the share price goes down.

Right, and then later on they hope to buy back

those shares at a cheaper price and then return the shares that they owe.

So it's kind of like the flip of, you know, buy a low so high, it's a sell high and then buy a load, ideally that is.

And for a quick example here, let's say that I own 10 shares of industry focus stock

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