Re: Small Change
I believe the actual way shorting works is:
1) Short Sterling;
2) Push for no-deal;
3) Wait for the pound to collapse (further);
4) Wait longer
5) Uh oh...
Shorting works by buying a short-term option on another entities equity - if the option is worth more at the end of the contract, you lose money, if it is worth less, the entity your purchased the option off loses money. It is a zero-sum game.
Typically, the hedge funds doing the shorting will balance their risk across options because if you are wrong (i.e. https://www.theguardian.com/business/2008/oct/29/vw-volkswagen-short-selling) things can go very wrong fast.
The suggestion that someone is profiting from shorting on the current, very uncertain Brexit (both in terms of date and outcome) doesn't acknowledge the realities of the equities markets.
Having said that, I am in favour of shorting being restricted - while it serves a purpose, negatively affecting the price of some equities is far easier than positively affecting the price, leading to market distortion.