Shorting of Stocks, how does it work?
During sharp sell-offs the institutional investor can determine how severe the downside is in the short run by seeing how many people are available to purchase your offer to sell. A lot of available buyers could indicate that panic isn’t warranted. If the Ask dries up, that means traders have pushed away from their desk and want to see just how low the stock or the market will go. There’s another important insider measurement used at the street level that helps determine ‘what’s going on behind the scenes’ – Short Interest.