RE:RE:Tasty breakfast.Yep, just like toothpaste out of the tube. Generally they get caught by a News halt. Then if the News is good they tend to drive the price higher at the get go and now that they have the loss they generally become longs by taking long positions....Having said that a News halt that should drive a stock up 10 cents might drive it up 15 cents with heavy short action being covered. Remember for the shorter it is now about recovering the spread from the short sale to the cover price. So the short now needs to become a long for a much higher amount or move along to try and short another stock.
So...shorted at 18 cents......looking to cover at 14 cents....Stock Halted 1.5 days...News is fantastic.....Stock opens at 32 bid....35 ask......first hour 15 million traded stock is at 39 but hit 44..The shorter got covered at 40 and now has a 22 cent short fall. Or over 100% loss. The only way to cover it is to start to do one of two things......day trade it for a few days in the hope that you can make up that 22 cents a few cents a day every day or go long and stay long until more fantastic news comes out which eans your going to be there until it hits 62 cents just to break even. It's at this stage your really hoping it can go to $1.00.
old_dog