Short selling is a technique used to profit from a fall in the price of a stock. Shorting is essentially someone selling a stock trying to drive the price down or who thinks the price will go down then buy back in later at a lower price resulting in a profit.
The important no is the % of the stock volume that was shorted for that day. If you look you will see the higher % correspond to big red days for MMJ.
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1
Date
Gross shorts 1
Issued capital
% Capital shorted 2
Trade volume 3
Shorts as % of volume
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1
Mon 24th Apr, 2017
308,545
204,792,934
0.15%
2,053,479
15.03%
2
Fri 21st Apr, 2017
189,584
204,792,934
0.09%
4,315,017
4.39%
60c up to 64.5c down to 59.5c
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0
Thu 13th Apr, 2017
88,034
204,792,934
0.04%
2,089,560
4.21%
1
Wed 12th Apr, 2017
209,612
204,792,934
0.10%
1,780,682
11.77%
2
Tue 11th Apr, 2017
142,442
204,792,934
0.07%
3,473,299
4.10%
3
Mon 10th Apr, 2017
425,722
200,917,101
0.21%
3,884,547
10.96%
(70c down to 60c)
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1
Wed 5th Apr, 2017
460,937
200,917,101
0.22%
7,698,770
5.99%
2
Tue 4th Apr, 2017
258,679
200,917,101
0.12%
2,959,439
8.74%
70c to 59c
10-15% is pretty high considering there were no announcements that were a definitive sell and can cause a cascade effect of other people panic selling. MMJ has a higher % then any of the other ASX MM companies.
This is one reason why i wont use automatic stop losses because it guarantees the professionals short selling will have somewhere to buy back in and make a profit off the people who sell and you are now missing out when it bounces back.
Having stop loss targets is fine but do it on the day and look at the market properly and whether there is a reason it will keep going down before selling. If you are worried about losing your money don't invest until you have done enough research to be confident in your choice.
MM companies are so volatile it is hard to tell what is going to happen short term but long term pretty much everyone agrees if you diversify between companies you should do well based on the growth of the industry. Yes this lead to a bubble but it looks to me like it has popped .
People keep complaining about bots but these things drive down the SP a lot more. If you aren't a professional investor it has been repeatedly demonstrated that you should have a long term view and ignore the short term manipulations.
