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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Charles Hughes who wrote (11798)	9/1/1998 11:36:00 AM
From: Robert Graham	Read Replies (2) \| Respond to of 14631

Once shareholders have been disappointed enough times and the stock starts trading with a very pessimistic "tone" to it in how it responds to oversold conditions and supports and positive news events like earnings, it will continue to trade down. This condition is difficult for a stock to shake off. I bet short interest went up significantly over this last quarter. What is interesting as I have note in my previous post on the psychology of shorters, the shorts will hold their position if they can even though they can collect a nice profit and the stock has already sold off substantially to a low number. They are thinking "see, I was right, and the stock will go down MORE" and in the back of their mind they are hoping for a price very close to ZERO. IMO the shorter is the type of trader that is the most vulnerable to becoming emotionally attached to their trade. I think there are rules about margin at these prices. I do not think stock can be margined at a price much less than 5. Am I right? I imagine that is why brokers like Schwab issued margin calls. Or does this only apply to new short positions? I do not short. Instead I use PUTs. Bob Graham