RE: RE: ShortsYou may be right that the vast majority have flipped and moved on but at some time we should have seen a substantial drop. I don't recall that happening. We only see the "net" numbers every couple of weeks which could hide the transactions.
A scenario such as this can occur though:
You buy 1 million shares (or any number for that matter) at $6.00. You are long on the company and quite happy to see the stock rise to $14.00 At $14.00 you say that the stock might have got a head of itself and will probably drop.
Instead of selling your interest (you are long afterall). You want some insurance in event that it drops a little or a lot.
You would borrow the same amount of shares that you plan to stay long on and sell them (short). Borrowing the shares costs you nothing.
At this point if the stock drops $10.00 you lose nothing because the money you make being short is the exact same as what you lost on the down draft. You have insured your $8.00 profit from when the stock went from $6.00 to $14.00 as well.
If you are wrong and the price goes from $14- $20, the amount you lost being short is the exact amount that you made on your long position. Although you never made any more money you insured yourself for a drop. You could cover at this time and enjoy the ride higher.
If the above scenario has taken place then that big overhang of shorted shares could be a long position who bought some insurance as opposed to a bunch of vultures who smell blood.
You may recall that there was a bought deal some time ago for somewhere around 10 or 15 million shares at $6.00.
If these are shorted for insurance(hedge) then the issue of covering is not something the short person worries about, even in this market. Even big announcements which could cause a major run would not be a worry.
Plausible?
Wes