SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Seagate Technology
STX 237.49-1.3%Nov 21 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Roger Mory who wrote (5644)9/11/1998 2:34:00 PM
From: William Epstein  Read Replies (2) of 7841
 
Roger Mory;

Just as enough long purchases usually raise price levels of a stock, conversely enough shorts can overwhelm the purchases and bring it down. This is sometimes referred to a short overhang. When the purchases are strong the specialist will often sell stock he doesn't have to the buyers thus accumulating shorts. He has margin credit of 1000 to 1 so a million in working capital allows him to carry 1 billion worth of shorts. Often enough to eventually overwhelm all the buyers on any given day. Since he cannot short on downticks and only on upticks this rule plays perfectly into his hands because he is selling at ever higher prices and thus increasing the spread between the initial short and the eventual covering price level. The spread is his profit. He can carry the fictitious stock he sold on margin and continue to accumulate shorts for a long time. Thus he can often make more money going down than going up and usually, faster too. In the convoluted world of the NYSE this is reality. Shorting was never invented for the public but for its members, as a tool, used to control prices. Selling fictitious stock skews the advantage, whatever it is, in favor of the specialist. Combine that with almost unlimited credit and his capital requirements (kept secret on the NYSE) and he is in an almost no lose situation. Going up against the specialist is like going up against an M-1 tank with no clothes on. The best you can do is to try to guess his next move and that takes experience. Now you know what 99.99% don't know. Happy investing, if you can call it that.
William Epstein
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News