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Biotech / Medical : AHTC Corp (AHTC)-formerly Advanced Health (ADVH)
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To: Kevin Savage who wrote (314)10/20/1998 9:33:00 AM
From: Zebra 365  Read Replies (2) of 371
 
<<What is "stealth short covering"?>>

I imagine it refers to the fact that many institutions may hedge stock they own long by also selling it short, in effect holding two offsetting positions and locking in the price at whatever point they sold the stock short.

Their short position will show up in the monthly short position totals.

If they then cover the short by delivering the stock they hold long, (rather than purchasing stock in the open market like a "naked short" would have to do) then the short position will be wiped out without any increase of or effect on the volume of shares traded, as the public transactions that created those two positions occurred long ago.

So the short position in any stock can be significantly reduced without showing up in the daily volume reports and this type of covering rarely contributes to a "short squeeze" except for the fact that it does reduce the effective float.

Zebra
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