the shorts are screwing themselves..I am here to learn and discuss in a respectful manner. Thank you all for comments that help us all understand this situation better.
Some of the short sellers are using First Majestic as a legitimate hedge.
That is... when option traders start a long position in silver, some will "hedge" thier bet by selling First Majestic short...
So If silver goes up they win on the long bet and lose on the short bet, If silver goes down they lose on the long silver bet and win on the short bet... They run all kinds of math to choose what prices to invest at, ultimately they decrease the chances of losing big, and increase the chances of a (smaller) win. So they dont really care if thier AG short fails and loses money, as long as they win on the long silver bet.
IMHO.. This strategy cannot effectiveley be used with First Majestic any longer , for 1 the dividend they will need to pay out if they dont cover thier short will make the hedge less and less effective over time, and 2. the hedge becomes very dangerously unsound as more shorts are added. When the short position is so large like AG is now... a small number of shorts covering, or buying back thier position can drive the SP higher with no other fundamental drivers.... a rise in share price without a corelated price move in silver negates the effectiveness of the hedge...
and another way to look at it.......
Lets say AG is trading at $12 USD...
Last report says there are over 50 Million AG/FR shares sold short some $625,000,000 USD, that means that 220 mil plus the 50 mil shares sold a second time have been paid for by investors.
so that is now...270 mil shares by $12 is 3.24Billion.. total investors dollars
but there are only 220 million shares available...
3.24 billion total investment dollars divide by 220mil shares is
$14.73 USD/share.. So a $2.73/ share discount compared to the total dollars invested.
when short sellers choose to cover, that money goes directly into the share price, as they have to buy back at whatever the price is. Creating a short squeeze, where buying back to cover shorts drive up the price...
Other short sellers, it appears to me have shorted COMEX silver, and AG in what should be called an illeagle attempt to drive silver prices down. Why they would do this is for another conversation...
I support ideas that will limit short sales as suggested by some like...
Limiting the number of shares for a particular company that can be sold short,
Limiting short sales to only some (high value) companies,
Reinstating the uptick rule, (decribed at https://savecanadianmining.com)
These things will help to reduce or eliminate the predatory and illeagle short selling that is used only to drive prices down in a clear attempt to manipulate the market and steal your money..
Predators have used short selling to drive down smaller companies that have no defence for this kind of selling pressure...
check out "save canadian mining"
https://savecanadianmining.com