something is up..., page-61

Hi (1912)

- "how long can the "shorters" retain their short position" -


I am no expert on this ... everything I know I learned the hard way when I held LNC stock. In a nutshell the answer is indefinitely.

Stock will have been borrowed for some fixed term but when that term expires it can be re-borrowed [rolled over]. The funds raised by shorting a stock will be redeployed somewhere else as a long position [i.e paired off]. The overall profit/loss of the combined trade will determine whether they continue the position or terminate it.

The main problem for a stock which is heavily shorted is the short seller does their best to maintain the stock in a defined trading channel as part of controlling their risk. So, typically, when a good announcement comes along the SP might initially respond positively but then along comes heavy selling driving it back down again.