Ugetreal! Just a scenario how it works.
1) Assume fund manager initially bought at $4.00 (a few years ago). At $6.00, fund manager wants to buy more BUT NOT at $6.00, want to buy at $3.00. The fund follow index closely so cannot sell too many shares to push share price down. How does fund manager buy more shares at $3 if without short sellers? Can't!
2) Lend to short sellers, collect premium AND dividends. Let short sellers crash the market to push down to the price long-buyer wants to buy eg $3.00.
3) Short sellers pushed down to $3.00. The same fund manager bought more shares at $3.00 (as sp fall, fund manager needs to top-up to re-balance the weight to follow the index).
4) Sp recovers to $6 later on in the long run.
Fund manager makes profit from:
a) $4 to $6 - the initial purchase
b) Short-seller premium
c) Dividends
d) Bought more shares at $3 (move to $6)
Without short-sellers, fund manager cannot get (b) and (d).
Once get back to $6, the fund will be overweight so fund manager trim down to rebalance weighting.
This just a scenario how short-sellers essentially help long holders make money. Just IMHO.
I initially bought at $3.45 (after trading halt) now make big profit. Thanks to hedge fund like Jim Chino.
Thank you very much short sellers, you make me rich.
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Ugetreal! Just a scenario how it works.1) Assume fund manager...
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$15.99 |
Change
0.605(3.93%) |
Mkt cap ! $49.03B |
Open | High | Low | Value | Volume |
$15.55 | $16.02 | $15.49 | $83.02M | 5.255M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
25 | 10827 | $15.98 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$15.99 | 12470 | 24 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
17 | 11313 | 16.000 |
19 | 20297 | 15.990 |
20 | 25740 | 15.980 |
11 | 14955 | 15.970 |
11 | 21798 | 15.960 |
Price($) | Vol. | No. |
---|---|---|
16.010 | 18864 | 25 |
16.020 | 23980 | 17 |
16.030 | 14699 | 13 |
16.040 | 17192 | 13 |
16.050 | 16733 | 13 |
Last trade - 15.34pm 02/07/2025 (20 minute delay) ? |
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