hermans,
that's not quite correct. The shares that are sold by a shorter are not set aside by the market. They can be purchased by anyone. If I sell a stock that I have borrowed I do not know what the buyers intentions are nor can I limit what they do with the newly acquired stock.
In short, the shorters are exposed!!!
Having said that, I'd be interested in knowing how many Longs have taken the opportunity today to book some profits?? We've seen a 20% rise over the last week that has likely provided too much temptation for some - especially after the recent sell down.
GXY Price at posting:
41.0¢ Sentiment: None Disclosure: Held