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Author Topic: What is the power of selling a stock short?  (Read 12404 times)

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April 10, 2010, 11:59:06 AM
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Jack


Perhaps no ordinary indicator, but I notice that many people pay attention to the amount of shares sold short. The more the stock is shorted the more the enthusiasm rises.

Is it good or bad when a stock is evenly shorted? I notice, when a stock is shorted, many people want to get in, because they expect an increase in the pps, or a short squeeze.
But who's wrong? The shorters have their reasons, and the buyers have their reasons.
Through my experience I know that shorters are very powerful. I do not know if it is possible, but if the MM's can short, then the manipulation will be even greater.
It seems to me a very big risk to invest in a stock that is evenly shorted.

Right or wrong?

April 11, 2010, 09:27:29 AM
Reply #1
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Dr PennyStock

Administrator
Jack,

My experience tells me that in 99% of the cases, the bashers are right, I saw things like this, hundreds of times, and, short squeezes are very rare, because most of the time the shorters are connected with the MMs, and, they find a way to manipulate the stocks to the shorters be able to cover, without cause a short squeeze.
Dr PennyStock

April 11, 2010, 11:25:41 AM
Reply #2
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Jack


Thanks Doc, Your experience is worth money. I had also a suspicion that shorters are powerful. Thanks for the confirmation.

This makes it difficult, because shorters are everywhere.

April 11, 2010, 12:07:10 PM
Reply #3
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Jack


One more question: What has to win a shorter when he shorts a stock that has a pps of 0.0001?

For example : CMGR

Date|Symbol|ShortVolume|TotalVolume|Market
20100409|CMGR|29085000|67995000|O

April 11, 2010, 01:38:56 PM
Reply #4

IAMCLP1

Guest
Thanks Doc, Your experience is worth money. I had also a suspicion that shorters are powerful. Thanks for the confirmation.

This makes it difficult, because shorters are everywhere.

Jack, shorters are VERY powerful if you really want to do some interesting reading. They think "Naked Short Selling" is what caused the collapse of  Lehman Brothers, do a quick search on that. I don't think we give the shorters enough of a factor in the game. We pay attention to what the MM are doing on L2, but how often do we look at what a short position might be?

Stocks are as complex as you want to make them... The more I read the more questions/confused I get.

April 11, 2010, 05:25:33 PM
Reply #5
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Dr PennyStock

Administrator
One more question: What has to win a shorter when he shorts a stock that has a pps of 0.0001?

For example : CMGR

Date|Symbol|ShortVolume|TotalVolume|Market
20100409|CMGR|29085000|67995000|O


Easy, if a stock is really a POS(we have thousands on the OTCBB and Pink Sheets), and is trading at .0001, the most probable is to make a R/S and continue to fall to .0001, so just see this example, the stock is at .0001 and someone short it, the stock make a 1: 1000 R/S, the price pos-split will be .1, the stock falls to .0001 in a few months, and finally the short covers at .0001, he/she made a 100,000% profit trade, because it's like to buy at .0001 and sell at .1, just do the math, it's an incredible profit, if you just invest $1,000, you make $1,000.000 profit, do you see why they are so powerful?   
Dr PennyStock

April 11, 2010, 05:40:40 PM
Reply #6
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Jack


Unbelievable! You would manipulated for less.  ;D

They destroy companies. In this way they are a prey for the lions.

May 18, 2010, 02:18:21 PM
Reply #7
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StockAim


Here are some stupid questions.
Since im not that familiar with short selling.

Where do you see how many shares are short in QT?
Can anyone short sell? Like can i just put the amount of shares i want to sell and just click sell instead of buy? is that how its done?

*in the RAW data of QT.. wht does it mean when the volume is negative
05/12/10   10:33:14   0.0252   0.0518   0.053    -94495
I have enough money to last me the rest of my life, unless I buy something.

May 18, 2010, 02:55:01 PM
Reply #8
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Vegas


Here are some stupid questions.
Since im not that familiar with short selling.

Where do you see how many shares are short in QT?
Can anyone short sell? Like can i just put the amount of shares i want to sell and just click sell instead of buy? is that how its done?

*in the RAW data of QT.. wht does it mean when the volume is negative
05/12/10   10:33:14   0.0252   0.0518   0.053    -94495

First you will need to change your account with your broker to a margin account if you have not done so already... It cost nothing to change to a margin account... Just call your broker and request they convert you to a margin account.

Then when you go to make a trade, you will have a "short sell" option as well as your regular "buy/sell" options... Also review the short selling information and requirements on your brokers web page as it is easy to get into a money jam short selling if you do not completely understand it.

After that, just play the market in reverse. If you think a stock is going to drop drastically, short sell it as opposed to buying it. If you Google "short stock interest", you will find a bunch of sites that list shorted stocks.
♦♦♦ Give me control of a nations money supply, and I care not who makes it’s laws... Mater Amschel Rothschild ♦♦♦

May 18, 2010, 03:01:09 PM
Reply #9

IAMCLP1

Guest
Also review the short selling information and requirements on your brokers web page as it is easy to get into a money jam short selling if you do not completely understand it.



Great point vegas ... when you buy a stock "long" you can only lose 100% (as that is all it can go down), well then shorting is just the opposite. You don't have a set amount you can lose ...  ;D       

Also pending the stock price, whatever amount you buy to short. You need to have 2-3x that in cash to cover with sub-stocks...

May 18, 2010, 03:06:01 PM
Reply #10
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StockAim


Thank you guys for all your help.

I didnt know that you were supposed to have a margin account to do short selling.
I do understand the concept of short selling from my Forex trading experience.

I still cant explain the negative Volume in QT
I have enough money to last me the rest of my life, unless I buy something.