Identify Opportunities with Short Sale Analysis
Hi, mooers!
After learning the short sale data in the post: "Gain insights into market sentiment with short sale data", I bet you are looking for some case studies. Here they are.
GameStop is an American video game retailer. GME shares traded at around $20 per share at the beginning of Jan 2021. When Jan ended, shares closed up more than 1500%. How did this happen?
At the end of Dec 2020, GME's stock price was weak. Its short interest exceeded 100% of its available shares, indicating that bearish investors had sold more than the existing shares in the market.
On Jan 19, 2021, Citron Research, a stock research firm, released a short-selling report predicting the stock value would decrease to $20 per share.
Surprisingly, many retail investors flocked to buy GME's shares instead of selling shares, driving up the price. The sudden surge in demand sent the price even higher, and then a short squeeze happened. On Jan 22, 2021, the total short-selling volume peaked, and the stock skyrocketed by 51%.
Subsequently, GME's stock price continued to climb, and the short sale ratio plummeted. It means that short sellers were buying stocks to close their positions, further stimulating stock prices to rise. By Jan 29, the short sale ratio dropped to 30.7% with a closing price of $81.25, almost eight times where it was ten days ago.
Do you have a better understanding of short squeeze now? Let's look at one more case.
The chart shows that the stock price was in a downtrend before Dec 16 and then hit its near-term bottom with a sudden surge in short sale volume around Dec 16. After that, the short sale volume decreased, and the stock price rose. Two reasons may contribute to the increase in price. The first one is the investors' bullish sentiment. The second is the demand for buying stocks to close the previous short positions.
The stock price trend is negatively correlated with the short position ratio. However, the correlation is not absolute, as many factors affect the stock price. It is impossible to judge the stock price trend by relying only on a single indicator.
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Disclaimer: Short selling is the process of selling borrowed stock at the current price, then closing the trade by purchasing the stock at a future time. What this essentially means is that, if the price drops between the time you enter the trade and when you deliver the stock, you turn a profit minus any fees or expenses. When short selling there is no limit on how high a stock price could rise so the potential loss is unlimited. Other risks include dividend risk and margin risk, this strategy is not appropriate for all investors. Images provided are not current and any securities are shown for illustrative purposes only. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this video is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Milk The Cow : Cool
, u learned something new.
.
So it's all about short-interest % to look out for short squeeze
102935791 Milk The Cow: hhhhh
ur wifes boyfriend : the sec report to Congress and the report released by Congresswoman Walters are two different reports. The Short interest that was available to retail at the time was not even close it was over 100%.
I'm also very positive that the short interest is nowhere near what it is when it is known to the public.
and when the price starts to go up on a short squeeze that was going on with AMC and GameStop plus bby etc. there was a buy button removal. not too long ago the same thing happened in London for a metal material and the buy button was removed.
hdk which was running up in the market was not halted or button removed because the retailers were not the ones buying the stock as much as compared to institutions. GameStop and AMC were halted earlier this week and the price went down and it was suppressed I'm going up.
I ask myself is there going to be a short squeeze ever again for retail investors or will the market makers stop it in its tracks by halting or removing the buy button. sending orders to the dark pools over 50 sometimes 60% of the day's volume so it doesn't have any impact on the price upward movement. and the short volume is constant and usually rising while the shorts available to land land out magically appear everyday at different times in the day and night.
There is obviously something not being disclosed and being purposely hidden from the public. The DOJ have been busy prosecuting the securities fraud in the market as of late. so just because the ones in charge of all this are not getting in trouble now does that mean they will not be in a few years. your past will come and haunt you and you will pay for your crimes eventually. the way the market is set up and rigged against the retail investor has run its course and has caused financial destruction in our world economy. The blame should be worldwide in China ,London and here.
so any public information that is allowed from the sho is not to be trusted or considered reliable.
HengOngHuat888 : Short selling is so cool and unusual. The first time I witness is with GME and AMC. What a meme! Glad to witness such happenings in my life.
Alvinnnnnnngenius : Where can I get info of short interest in moomoo?
J Tan88 : When does short position need to close to cover ? Three months after short position was opened ?
If not short positions can continue to hold , until the next margin call ?
ankykong : it's interesting to see the charts and see exactly the impact we as retail investors have.
DarhamadAbedelrhaman :
Weicl : The first time I saw it was AMC.
101494038 (佩施) : good
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