Why do posters always blame 'shorters' when the price declines? Short selling is making a bet that the price will decline (so you can 'purchase' the shares you have 'sold' at a lower price). In the same way, buy orders are making a bet that the share price will increase. Short selling therefore needs to be looked at not by itself but in relation to the share price - short selling often increases when the share price rises, with 'shorters' betting there will be a downward correction. Short selling of KDR began to increase when the share price reached a peak of around $2.25 in June 2018 and then continued to increase as the share price dropped, shorters 'betting' that the decline would continue. Recent lows in the share price by mid-October (about 85 cents) coincided with a reduction in short selling ('shorters less confident that the decline would continue) and then started to increase again as the share price recovered. Its all very rational, in the same way that 'buying' a stock is rational in that the buyer is betting that the share price will increase. KDR is, anyway, not a 'highly shorted' stock with only about 0.1% of capital being shorted daily and around 8% aggregate volume. Not even in the top 20 of shorted stocks in contrast to GXY and ORE which both have more than 15% of aggregate volume shorted. So, stop blaming someone else whenever the share price declines - its actually the other way around where trends in the share price drive the extent of shorting in exactly the same way that share price trends drive 'normal' buy/sell volumes.
KDR Price at posting:
$1.36 Sentiment: None Disclosure: Held
