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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: dday who wrote (9270)	3/3/2001 3:05:56 AM
From: Prognosticator	Respond to of 10309

You are right of course. Short traders act as an important check and balance on the stock price, without them a stock would periodically climb to huge valuations, then crash to the ground as everybody tried to exit all at once. It's just frustrating to 'know' that the reason a stock is driven down is because of the short activity against it. But then again 'knowledge is power' and that's a good time to buy the stock, before short covering kicks in and drives it up 25% in less than an hour. That's what we're in for shortly, IMO. Today was only a little bit of short covering, but impressive all the same. P.

To: dday who wrote (9270)	3/3/2001 11:13:48 AM
From: gingersreisse	Respond to of 10309

Good summary of the rules. Agree on the cash account transfer, it's a wonderful way to trigger a short squeeze if enough people do it. One additional point. The broker's risk management department may (should?) also monitor house wide exposure on shorted stocks, to avoid a three way arbitrage. Shares from your account are loaned out. The same co's shares from my account are loaned out, and we're both at margin limit on our own borrowing. In the worst scenario, the unborrowed stocks in my account go down, creating a margin call for me (capital deficiency) while the specific shorted stocks go up, creating a margin call for the borrower. House loses twice over. The usual solution is to limit what % of clients' total inventory in each stock will be loaned, monitor market liquidity, and to put higher volatility shares on the "no loan" list. Schwab has dozens of stocks on that list, plus virtually of the Bulletin Board. GSR