Sorry for my ill-thought response this morning. I hope I did lose any creditability (if any) for the BS that I posted. So I give you this as my regret:
forbes.com
sec.gov
The above links talks about MMs, but applicable to specialists as well...same breed, different color pigs.
<<why would they allow your short to make money now but not then?>>
Because he/she sqeezed the weak hands (as indicated by Mohan, the UCLA student on CNN, and the people in this thead)and only a few remained short at the top. As Mohan (and others) covers, he has to buy from the specialists, right? The specialist has to provide the shares, right? But the specialist probably dont have anything to sell because the rally attracted loads of buyers, right? So the specialist sold short to give Mohan the shares that he needed, right? Then specialist has to cover, right? Since they have the power to command prices, they are likely to go lower to cover, right?===there it goes!!! People are now too SCARED to short at the top---that is the objective of the specialist. He/she doesnt want you to buy at the bottom and sell/short at the top.
Lets do an exercise, if you were a specialist and you have a trading account as well as an investment account. Would you like your customer (investor) to buy your stock at the low, and sell the stock back to you at the high??? Hell, no, you want them to do the reverse.
Please also check Richard Ney's books:
Wall Street Gang
Wall Street Jungle
Making it in the Market
for details on specialist shorting, investment accounts, SEC...
I wished I had time to give U a better responce but I only have time to check SI in the morning and before dinner. Later. Be sure to read the material. |
