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Facthunter

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09/05/19

21:16

Post #: 38495797
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Originally posted by dmaivn: ↑

Orderly? I don't think so. Shorts can only borrow what is available at their own broker. When the real owners of the stock decide to sell, the broker will have to find the shares by forcing shorts to cover. This is a nightmare for shorts when the stock runs up like crazy as some shorts borrowed and sold shares at the middle of a big bull run. If it runs up another 10%, the forced cover may happen and the shorts may lose instantly without a chance to do anything. It's not just the margin call that they have to worry about. A broker cannot borrow shares from other brokers to help the shorts. Also it does not make sense to do so. The business of a broker is to minimise its own risk, make sure settlement happens without issues and earn commission on the trades. So, they need more trades to make money. In fact, the more investors lose because of these forced selling on margin calls or forced covering of borrowed stocks, the more money the brokers make I think the 43% jump on KDR recently knocked all the shorts out of KDR as the jump happened within under an hour after the announcement.

I think the short squeeze on GXY has not even started. I hope we will have a decent run ahead of us. I pray that it will run over 1.85 in the next 2 weeks so I can get out If any take-over offer comes along making it jump 40%, I will be so grateful!

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i think your making it a bit more complicated than than it may be.
say a share can be loaned out as a short to a family member that same share can then be sold to the family member at whatever price to resolve the short
the family still holds the share and the money transacted nothing has changed with the family situation,what has changed is the value of transaction (or sentiment) recorded through the market.

GXY Price at posting: $1.65 Sentiment: None Disclosure: Held
2 Upvote

0 Great analysis

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