Satyr; Let's look at this thing from several angles,
Me >Re The only people shorts can make money off are those
that sell..<<
You> I would think that applies too buyers to for who would you buy your shares from if not a seller.
I did a post some time back about how brokers hold short positions
"front sell" using their in house data knowing how many shorts
are coming into the market they can short x shares in front of them often maintain a balance and can see when to close and close ahead of the outside shorts they would not go to the trouble
of borrowing shares if they did not get a slice of the pie,
so they justify this and I don't think any regulations are against it ( may ought to be ) except it's not supposed to happen on the Floor of the NYSE..but the DOJ has uncovered it there also.
I gave more detail in an early post my guess is you didn't
read.. Any way to answer your question it is very likely that
when I bought my shares they did not come from a seller,
but from a shorter , the two are not the same. Someone via
his broker sold me what he didn't own. So it holds that I may
buy from a short , ( who at some point "must" buy back from someone)
He will never make money from me if I don't sell, his hope
is to buy from someone else , "often another shorter" or some
nervous nellie who decides to or has to take the loss, because of a margin call. I don't buy on margin unless the check is on
the way to the broker ( ie I never have a margin call or even
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>> I disagree with your analysis and know that most TRADERS use shorts
Go to a SOES bandit thread, they are heavy traders..you will find
that the most do not use shorting..in fact I do not know of
any that use shorting they zero in on momentum stocks going up.
Brokers short about as many as any one but their position may not
stay open even a half a day. They stay on top of the heap.
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That mean not trying to pick tops. A smart Shorter unlike his
they sell. They move on to another opportunity while the long
sits and waits and prays.
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Some longs do more than pray..they average down..My one biggest
hit was AMD in 96..I started at 16 and bought down to 10.25,
I later sold too soon , but I did my home work good on that
one and know for a fact I beat the best of the shorters pound
per dollar about 2 to 1. I watched the short interest all the
way. I do not pick tops good, nor do shorters, I do pick
bottoms better than most shorters..
Bottoms are not as hard to catch as tops, ( the dif being a
stock can only go to zero ..but can easly more that double,
and often does. ) Falling knives are no big thing after you
get use to them, but a rocket up the rectum can really mess
you up bad. The long can stay long on a drop..but the short
can not always stay short on a climb..he can get bought in
and at times well above his stop loss , ( I never use stop
loss in any form ) I never short naked. Stop loses are a mark
of a sucker, and brokers know that too.
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Let me add when a wise man and a fool argue they become equal
and the fool knows it. I hope you do some study, I'm 60 years
old and have likely traded more issues than you have shares.
I got a fair but I know not complete education of how brokers
work as I use to work on computers and did a quid pro quo type
deal for my education by setting up some computers for
some brokers in their homes , ones I considered fairly honest,
and were willing to share information with me that they don't
talk about in public. When the big shots found out a client was
doing some personal work for some of their brokers they got
suspecting something might be up..and shut it down..<G>
---------------------------------
I never got what you call "inside information on any
trade " but we drank a lot of coffee..and had some long chats,
and at best you might say I was given some hints on a few
stocks..which mostly did move..but more short term than long.
What I was after was understanding the gears , and how trades
were placed..like how often brokers farm out big trades to other brokers, sort of piece meal to try to cover their tracks.
There is a lot I still know I don't understand,
But I understand this.
In this market I doubt 5% of any of the best can beat making
what the better brokerage houses make..they got the edge,
we are just minnows in a sea of whales, ....and sharks.
Jim
Message 3743646
Message 3746860
And a short can not make money off me if I don't sell,
un less the company goes compleatly under,
he is stuck with exploiting other shorts, nervous nellies,
or over margined momentum players.
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I learnd to stick by my guns when bottom fishing, it would
take huge disaster to change my mind once I'm commeted,
if I liked it to start with why change just because some
carpet baggers come in. Do you know the price on a stock
can fall "but due to borrowed shares" the real market cap may
not fall at all, but only look like it ? In fact the real market
cap can move opposite the apperent price, as the apperant
price includes a lot of shares that don't really exist.
Some thing to think about ?
What is the real market cap of CPQ ? very few people have
that information..at least in an up to date form.
Real market cap is the shown market cap x the percentage
of shares short..which can change in a heart beat and us
not know it for most a month. Real market cap that we don't
really know, divided by the float will give you the fair
market value of your shares today..
With the shorts that were already here when I bought, I'm
still sure my in price is still below what it would be if they
covered, and it will stay that way as I will buy her down to
maintain that, not just pray. I'm most sure if all the shorts
were to try to cover on any one day next week the price would
pop to 36 so fast it would shock you, but I'm also most sure
that all shorts would never try to do that on the same day. <G>
There are going to be a few die hard shorts you know..who when
the price starts up will short more and try to average down
their short position much like I do my long position, give
it some study..the die hard shorts got about the same personality
I do..are likely just as great in number, but just have the opposit approch..they will short more as the price goes up to average
down much the way I buy more as it goes down to average down,
the contest between us average downers (a small percetage of
hard headed people ) goes on. My approch gives me an advatage,
even if I'm not as smart as the shorter in many other ways,
I at least managed to see something he doesn't see or won't
look at. The stock can only go down so far, but it can and often
does more than double..so all other things equal, if he
plays the average down game like I do , but on the other
side, he will more often than not have to average down
a lot more than me to win.
Yes there are hard headed die hards on both sides, and if you
chart short interest history across the board you will find
my type wins hands down 3 to 1 over them. As they go broke
more new blood comes in..somtimes they don't go all the way
broke before they convert over, yet the market keeps getting
new blood and the new die hards tend to want to play the
short side first..( I don't know why they just do ) :-)
Seems they are plenty smart at times and offer a lot of insights,
but just have a simple blind spot to the fact that die hard
shorts get the short end of the stick, 3 times more than die
hard longs.
Chart BEARX which is the very best of the short funds, with
trained pros at the helm ! And they have not been able to show
any kind of long term profit. They trade in and out in a heart
beat..( are margined ) and could face disaster any time.
About the time they go bullish , the market will crash on them,
they know that so they struggle to stay short as hard as they
can but only keep sinking deeper into the quick sand.
I think what they hope for is someday a big huge sell off will
pull them out off the hole..what they don't know is that the
real big money Bulls if they plan a sell off, will call in
all the stock they have out on loan, before they make the sell,
They are not stupid either the bulls were here first. They own
the shares, and can call in loaned out shares when ever they
want to. In that respect the short is at their mercy.
My suggestion is if your bearish, buy puts..or use a bear call
spread, limit your risk that way, don't short naked or count
on stop loses to save your hide. Stop loses can give a false
sense of security, may help you several times, and look like
handy things..but one really good after market spike or drop will sooner or latter take that all back in a heart beat. Traders can
use them OK on a daily basis with some luck, but don't let them
sit over night.
Jim
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