mamooth
Diamond Member
In this case, it's not that simple.Wouldn't this be good for the short-sellers? ...
In order to sell short, there has to be someone committed to sell when the term is up. You'll have to pay a small fee to have someone hold the stock. Normally, that's not a problem, since the fee will be insignificant.
Not so with stocks that everyone expects to fall. Anyone holding the stock for you will charge an arm and leg to do so. Say, 20% a week.
That means you can short, and if the stocks only drops 15% over the week, you still lose big.
And, in this case, you have no idea what big money behind the scenes might be propping the stock up.
As someone once said about shorting, the market can remain irrational far longer than you can remain solvent.
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