Extra supply is forced to the table by hitting stops of the longs! By shorting, and dropping the price as they sell through the bid queues, new sells arrive "automatically" as stops are hit. Almost too good to be true hey..?!
They can then buy up that new supply for an average price less than what they sold for initially (or along the way).
Just imagine it the other way around... "Longing", whereby you buy shares and this actually triggers forced bids as the price rises..! Then you can sell into the new demand at higher prices! Wouldn't that be nice.
Manipulation much? I guess a stop loss is not mandatory, so one could argue that it's all legit, but I don't t like it. For example if you have a margin loan, you may have no choice, if you can't cover to maintain the required LVR. Dirty shorters. It seems those with the big money and the access to these "processes" can't lose..
No stop losses for me, they won't have my shares until I choose to sell them closer to the $15 or $20 mark someday...
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- Strategy to burn the shorters starting Monday 4 December
Strategy to burn the shorters starting Monday 4 December, page-37
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