A number of posters (notably @slick and @wednesdayschild) attributed some of the increase in shorts to them being used as a hedge.
I don't get it.
If I have 100 shares in a stock that's trading at $5, I have an unrealised 100 x $5 = $500.
If I short 50 shares at $5, I have a realised $250 and an unrealised (100 - 50) x $5 = $250. While I still have my 100 shares, I owe someone else 50 shares.
How is that different to just selling 50 shares? Except if I use the short to "hedge" my position, I'm up for fees and interest costs, so I'm actually worse off than if I just sold the 50 shares,
Can anyone enlighten me?
CU6 Price at posting:
$3.93 Sentiment: None Disclosure: Held
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