Is this Legal?

When Wall Streeters take advantage of the system, it’s called capitalism, but when outsiders do it, it’s called manipulation.

This is where the narrative has been over the past 48 hours.

At the heart of the debate is a question about what’s right and wrong: how can there be more shares are sold short than are outstanding. Over the past two days, I’ve seen variations of the following question: “How is this even possible, and how is this legal?”

Obviously, I’m not a lawyer, and I didn’t even fully understand the mechanics of how this part of the business worked until yesterday. Thankfully I follow smart people on Twitter who can explain it.

The TL:DR is that the way the number is calculated is a bit misleading. Click on the link below to see how Jesse Livermore breaks it down.


Here’s Dave Nadig

Here’s WallStCynic

And here’s James Seyffart

I understand why the question comes up, “how can there be more shares sold short than total shares outstanding?”

I hope this primer from my smart friends on the internet helps answer the question.

Today is going to be another crazy day, be careful out there.