C L, I talked to a friend who is a broker. He called one of his company's trading specialists, and this is what he came back with:
When sold, the seller is required to deliver the stock within 3 days. However, they can request a one time extension of delivery for 8 days. So, someone can short a non-margin stock, but only for a short period, it must be delivered in 11 days.
So if you figure the shorts stepped in in big numbers starting 3/06, (as the stock exploded up to $14.50) those shares have to be delivered by tomorrow. This would explain the big move upwards on 3/18, the shorts (from 3/6) were forced to cover so they could have the shares in hand within the settlement period. Others who were shorting on the 7th, were covering on the 19th.
This could make it easy to trade the stock, if we see a lot of shorts being active one day, I expect that you will have 7 days to buy some stock, because on the 8th day...
Just a theory, but it explains a lot.
Mark |
