OTCQX:SREMF - Post by User
Comment by
King-of-Kingson Jan 17, 2001 4:55pm
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Post# 3144201
Also remember...
Also remember...Remember that when one shorts a stock at $30... he borrows the shares (physically)sells it on the open market... He is hoping the price will drop... and he will be able to buy back at the lower price to return the borrowed shares to its original owner... so if shorts 1,000 shares at $30... he'll receive 30,000... and can buy back as low as 5.25 for $5,250. Net Profit = $24,750... The warrnats gusrantee him shares at 5.25. Without the warrants the price might only drop to $25.... He can keep shorting it all the down to 5.25 because he know he is guaranteed to be able to cover at 5.25 (i.e the supply is guaranteed).
In the meantime, my shares are going down too.
Knowing this, it might be a good idea to sell whenever you think a short term peak has reached.. because you know the shorts WILL be pushing the price down sometime soon... maybe all the way back down to 5.25 -- until no more warrants are left to excersise...