Ohm wrote, Smaller shorts like Spiegel, Lamarco, G
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Posted On: 01/21/2022 3:55:02 AM
Ohm wrote,
This is probably true, but a scenario exists with a rapidly-rising stock where either: 1) a short could get caught without the cash to pay for shares that he needs to buy to cover or 2) a short is just too dumb to cover.
If CYDY goes from .60 to $20 in a hurry (buyout offer, for example), a short could have been successful 50 times and still lose bigtime.
When you short at .60, the most you can gain is .60 a share. But you could lose tens of dollars a share. It is as Marc said an example of bad risk/reward.
Quote:
Smaller shorts like Spiegel, Lamarco, Gleason and Stang are more than happy to clip a few thousand a week on an easily manipulated stock that has weak investor support. If they're successful 50 times in a row and get hit hard only once then they still come out ahead.
This is probably true, but a scenario exists with a rapidly-rising stock where either: 1) a short could get caught without the cash to pay for shares that he needs to buy to cover or 2) a short is just too dumb to cover.
If CYDY goes from .60 to $20 in a hurry (buyout offer, for example), a short could have been successful 50 times and still lose bigtime.
When you short at .60, the most you can gain is .60 a share. But you could lose tens of dollars a share. It is as Marc said an example of bad risk/reward.
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