GREY:WFREF - Post by User
Comment by
99999goldon Nov 20, 2014 5:24pm
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Post# 23149917
RE:short sellers DO have to pay the dividend.
RE:short sellers DO have to pay the dividend.aaaaaargh wrote:
To 99999 gold. Should we fire the SEC as well? https://www.sec.gov/answers/shortsale.htm
omg you deserve to lose all your money, if my last post is not clear let me try again. Say I short lre at 2.80 for 10k shares, the dividend of 0.035 equates to be 350. Keep in mind I'm not in the business of collecting a dividend but rather I'm betting that stock will fall from here. If the stock runs as it nears its ex dividend date say to 3 I can cover and collect back the 350 from LRE or continue to short it as I'm in the business of making a huge chunk off my short rather than the 350 which is no big deal. Let's say it drops to 2 after dividend is paid out or sentiment has change - how much do I make if I cover at 2? A lot more than the 350 but in any case if I'm short and greedy I'll continue to short and not worry about that small change and if the company is stupid and continue to pay dividends say at 2 at the same rate I get it back from them if I cover at 2 then I'm squared up.
Shorts can cover anytime it goes lower than they got it for the better.