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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: T. Ambrose who wrote (7166)	5/19/1999 1:32:00 PM
From: Rande Is	Read Replies (4) \| Respond to of 57584

. . . On short-selling and size. . . No problem, Teri. . .27k is the amount for sale at 6 1/4 . . this is not sellers, but short-sellers. . .if you don't understand that, you need to read some books or articles. . .there is a great new site for information on hot subjects now. . with links to freebies all over the web. At a particular bid vs. ask the size on the bid represents how much buying pressure there is at that level. . .the size on the ask represents how much selling pressure there is at that level When buying pressure mounts and price moves up and buying pressure continues, price continues. . . likewise on selling pressure. . . much the way a see-saw works. . .as people pile on one side, the other side rises. . then as they jump off the other side falls. On Nasdaq, there are Market Makers that short against your buys "to add liquidity" [in some obscure way]. . .likewise they buy into your selling. . .then the difference between the bid and ask [among other things] is where they get their profits. On Amex/NYSE, for each share bought there is one sold and for each share sold there must be a buyer for it. However, short-selling causes selling pressure based on the sale of "borrowed" shares. It represents an "open" transaction where a share is sold, but no cooresponding share is bought. This puts selling pressure on the stock, which must be battled with a larger amount of buying or the pressure will eventually begin to push down the price. On BDE, it appears we have a stale mate. . .shareholders refuse to sell, so the selling pressure remains the same. . .sellers are ABOVE the bid . . if we were to load up with shares at 1/8th, we could "match" their offer, which would probably scare them away. . . since they are not interested in increasing their short position with that 27k. . . they are only meaning to scare away buyers. . . and we will stay in a stale mate, provided share HOLDERS don't flinch. . .if we sell, we go lower. . .we buy up their offer and we go higher, simple as that. Shorts work on FEAR. . . no fear and they lose. Today, there is no fear on BDE. . .news is out and slowly diseminating. . .buyers are hanging in there and despite the short-sell pressure, there are no sellers. . . so we have a stalemate. If we were to stalemate straight thru for several weeks, we would have the distinct advantage. . .since news can come at any time and 90 percent of news is good. . .also word is spreading slowly to investors, so our numbers are growing, whereas the shorts are usually a "band" that works together, so their numbers usually stay the same. Now if we were to call in reinforcements, and buy up their offer at 6 1/4 [I bought there once already this morning]. . .then the shorts would have a larger position than they may have wanted . . .and with a rising price, would be forced to "cover" their long positions by BUYING stock to close their position. . .yes they sell first and buy last and it creates a closed position and is perfectly legal, provided there were shares available and designated for borrowing. . . Many will short "naked" shares, which means they did not bother borrowing, but their particular broker didn't care [often offshore]. . .so as long as the SEC doesn't catch up to them, they get away with it. This is not to say that BDE's shorts are naked. . .[when you lose your BVD shorts you are certainly naked <g>] Hope this helps to cover things for you. . . Rande Is <c> Copyright 1999 Rande Is +Lawyers demanding my inclusion of copyright notices on informative general posts, due to the number of my posts that get posted on other websites. . .many of which charge for membership. . . .sort of like Silicon Investor does. . hint hint.