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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Wade who wrote (12155)	2/23/2008 6:45:34 PM
From: The Vet	Read Replies (2) \| Respond to of 29622

Wade, the shorts in GLD have no fear of a short squeeze because it isn't possible. In stocks with a limited float, shorts can be squeezed simply because the stock isn't available for them to cover. Not that that stops them nowadays. The stock simply goes onto the reg SHO list and they remain naked short and keep their ill gotten gains. There is no penalty for non-delivery of short sold stocks of any kind. With GLD as soon as the price rises above spot the APs step in and sell stock and buy gold limiting the rise of the stock to the rise in the POG and no further rise can occur. The shorts can easily and cheaply protect themselves against a rise in the POG in another market so they have created a riskless position with a huge lump of free cash to boot and the chance of a windfall profit when the GLD market collapses. It can happen, and most things that can happen eventually do! If somebody can point out a flaw in my argument or point to a mechanism that will protect the GLD longs in this event please do so. It has pretty scary consequences for investors and traders of GLD..