Deep Dive: Short sellers are not just 'opportunists, speculators and profiteers'

Carries own set of risks

‘Going short’ can be a useful protective portfolio management tool, but it carries the risk of unlimited losses, experts warn.

John Leiper, CIO at Titan Asset Management, explained that the ability to ‘go short' "improves market liquidity and broadens the range of investment strategies that can be employed by an asset manager". "Markets spend most of the time going up, but that trend cannot last forever." He said markets are subject to cycles, driven by both "behavioural biases and the ever-evolving macroeconomic backdrop", which would "typically results in declining asset prices. Asset managers can benefit in such an environment by shorting stocks thus generating profits for clients that they might otherwise...