To: Sir Auric Goldfinger who wrote (229 ) 11/29/1997 1:48:00 PM From: ed doell Respond to of 342
Auric, I have no independent verification that what you say in your last paragraph is true, but no matter right now (verification can come at a later point: I'd like to see you post the verifiable content [increased # of MMs, INCA and BTRD trades, etc.] of your post as those signs and symptoms develop). That would be fascinating. I do not doubt the scenario you have written in the last paragraph. I find the statment, "Shorting a stock without much liquidity initally is part of the price of getting short something that has enormous downside potential and is not yet crowded," interesting in its implications, but am unsure that in this case there is "enormous downside potential." BTW, I was the one who mentioned the matter of the limited number of market makers and its implications. Interesting that you see the potential of a momentum short play here (increasing levels and numbers of short interest [pun intended]). Am I clear that that's your scenario (story) for what will unfold here? Very interesting, very thought provoking. I hadn't fully recognized it before, but just as a story develops regarding a stock to be bought and held long, a story for a short sale can evolve as well. Thank you (much to think about and learn here). And craig c., thanks for your points and compliments about my post. I think the issue of shortable price is probably a matter of preference and risk tolerance. I generally prefer stocks with a higher price and more liquidity to short because I see stocks with low price and low volume as riskier than those with several hundred k per day volume. An excellent discussion. Thank you gentlemen, Ed