Posted On: 08/08/2014 10:24:12 AM
Post# of 5282
it is true that one profits without having to ever cover with any short position.
Anyone who has ever shorted before can figure out why. You get the cash from the short sale up front and "owe" the stock you are short (in this case TEVE).
You can owe the short position forever. If you are at a 99% profit you don't have to cover yet can pocket the cash while having a tiny deficit position on the stock.
Let's say you had $100,000 in your account and shorted $100,000 worth of TEVE (or any stock) and the stock fell by 90%. Your account value is now worth $190,000, and, yes, your broker will allow you to withdraw say $150,000 in cash while not covering your short.
If the stock goes up there is an unlimited amount of money shorty can lose. They is why he is shaking like a dog passing razor blades.
So you say “Well I don’t have $100,000 in my account so I’m going to stop reading this. “Besides I have to go watch a movie on TV”
The point is you do not need $100,000 in your account. Right now $170.00 will buy you 10 shares and when the time comes for shorty to cover you can sell them to him for what ever price you like.
So you say
“That’s really good but I’ve been waiting and he is not covering” He never will till you get off your cheap ass and buy a few shares of stock.
Or until the college pukes at TelVue pay a dividend to attract more buyers.
Anyone who has ever shorted before can figure out why. You get the cash from the short sale up front and "owe" the stock you are short (in this case TEVE).
You can owe the short position forever. If you are at a 99% profit you don't have to cover yet can pocket the cash while having a tiny deficit position on the stock.
Let's say you had $100,000 in your account and shorted $100,000 worth of TEVE (or any stock) and the stock fell by 90%. Your account value is now worth $190,000, and, yes, your broker will allow you to withdraw say $150,000 in cash while not covering your short.
If the stock goes up there is an unlimited amount of money shorty can lose. They is why he is shaking like a dog passing razor blades.
So you say “Well I don’t have $100,000 in my account so I’m going to stop reading this. “Besides I have to go watch a movie on TV”
The point is you do not need $100,000 in your account. Right now $170.00 will buy you 10 shares and when the time comes for shorty to cover you can sell them to him for what ever price you like.
So you say
“That’s really good but I’ve been waiting and he is not covering” He never will till you get off your cheap ass and buy a few shares of stock.
Or until the college pukes at TelVue pay a dividend to attract more buyers.
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Holding TelVue shares has made it the billion dollar bomb shell it is.
There is no limit to the loss of someone has been caught in a short squeeze.
There is no limit to the loss of someone has been caught in a short squeeze.
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