why are there so many rules for short sellers?

Question

that longs do not have
like the uptick rule
or "that stock is not available for shorting"
or high balances to even be allowed to short
(and dont tell me because the theoretical risk is unlimited...no stock has ever gone to infinity)

its unfair

short sellers do not pound a stock down or make it go down any more than longs make it go up. If we could then I would never lose.

high short interest is supposedly a positive indicator because it will have to be bought back someday.

I often buy the puts and buy the stock in a different account to be able to trade the stock short

Answer 1

The uptick rule is to prevent excessive short selling from making a stock, or the whole stock market, crash. Short selling does push a stock down, because people entering short positions must sell the stock. More sellers means downward pressure on the stock.

The high balance requirement is to keep the brokerage from taking the loss from your investment. If you short a stock and it goes up, you have to put in more money to close your position. The brokerage wants to be sure you're good for the money so that they're not left holding the bag. They don't have to worry about that with long positions, because you put in the money up front, and if you lose it all, it's no loss to them.

Answer 2

Short selling involves credit (remember, before you short-sell, you borrow the stock from your broker's inventory). Long purchase (especially into a cash account) does not involve credit. So the broker wants to make sure that you are a bearable credit risk; hence, high account balance requirements.

As to "not available for shorting", brokers do not want to keep in their inventory a stock that has a high risk of becoming worthless or illiquid. If that happens, no one will want to borrow it, and the investment will be lost.

Answer 3

The reason is that they don't want short sellers to pound the stock down. If there were no short selling rules, shorts could hammer the stock down to make profits. The company and government want prices to rise, so longs don't have that problem.

However, the short sell rules only apply to equities, you can short futures and options anytime.