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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Steve J. who wrote (5213)10/5/1997 12:05:00 PM
From: Herm   of 14162
 
Hi Steve J. That's a good question. Investors that short a stock think the stock price is going downward. The number of "short shares" total sum can be mathematically divided by the daily volume of current shares traded to calculate theorically how many days it would take to cover all those short shares. Well, supply and demand in the stock market dictates that if you need to buy it, we will raise the price and sell it to you! So, as a CC writer we also want the best price for our CCs for the risk potential for losing the stock. Thus, we need to know the short interest to exploit the advantage we will have when the short squeeze kicks in. The major event is the earnings report which is going to force the short interest stampede!
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