I'll reply to an ancient post as I know the answer what the hell.
Traders of bear pelts back in the day would sell next years' anticipated product in advance but you had to be sure that you would secure supply. Kinda risky !
So it's existed in commodites since forever then since the early days of state-capitalism there were shortsellers in the VOC in the early 1600's.
A bear market is one in which shortsellers are likely to make money, like the bear traders. If gamblers are buying stocks because they are going up (bulling stocks in the old lingo) then you can't be on the other side.
If there's a high short interest then you should ask why. Do they have fundamental basis to be short or are they manipulating the market?
Market manipulation is rampant on both the long and short side, neither side has a monopoly.
When people trade on fundamentals either long or short then they will reduce volatility not increase it.
If shorts are manipulating the market then buy off them, they'll have to cover at a higher price. If they have valid arguments then change your mind don't anchor to a disproven investment thesis.
Shorts don't have power to determine the market price, no-one does not even people like Bill Hwang who live and die by the corner.
3 times I have bought into high short interest due to manipulation and momentum following. One of these was selling at 1/50th of fair value the other two at around 1/10th.
10x times I have sold high short interest as the company fell to Valhalla in a beautiful donut short.
There is no good side or bad side there is only the money side and thats the side you want to be on.
So what's the money side for LYC?
LYC Price at posting:
$6.56 Sentiment: None Disclosure: Not Held
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