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Posted On: 07/14/2020 11:20:52 AM
Post# of 32724
Re: Jelloshots #20217
One doesn't buy stock to short. To short a stock you sell stock you don't own....and yes you collect the money.
Say LT shorts VERB at $1.40. The offering goes at $1.30. Using the over-allotment shares LT can cover at $1.30. Ten cents may not seem like much but shorting allows them to keep the price down (easier to on-sell to institutional clients) and on half million shares plus 6% of the deal it adds up.
However LT has costs and risks too.
Enough on this topic for me.
Say LT shorts VERB at $1.40. The offering goes at $1.30. Using the over-allotment shares LT can cover at $1.30. Ten cents may not seem like much but shorting allows them to keep the price down (easier to on-sell to institutional clients) and on half million shares plus 6% of the deal it adds up.
However LT has costs and risks too.
Enough on this topic for me.
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