Mooers' Insights: To short or not to short
Many investors profit from stocks that rise in value, but some do the opposite – profiting from declining stocks – through a "short selling" strategy. 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.
The first round of the Capital Analysis Event inspired mooers to explore this strategy. In case you missed the event, we've prepared a collection of mooers' can't-miss insights for you. Let's check it out! ![]()
"BBBY led another meme stock craze!"
As @Mars Mooo put it earlier on Aug 13, "Notice that there is a period of price stability before each unusual high volume of short selling, which result in more than 20% increase in stock price. Thus, we might be able to see BBBY stock price moving up within the next month after a period of stable stock price."
@robinmc explained, "It's easy to see why bears have come out against the stock. Its recent results have taken a beating from the shift in consumer spending habits away from home goods. Comparable sales plunged 23% in its most recent quarter, and it reported an adjusted loss of $225 million."
@JulianMackie added, "There’s also an interesting connection among two of these companies. Specifically, $GameStop(GME.US$ Chairman Ryan Cohen reportedly bought out-of-the-money call options on 1.6 million $Bed Bath & Beyond Inc(BBBY.US$ shares. It’s possible, then, that traders observed Cohen’s apparent confidence in meme stocks and consequently went all-in on $GameStop(GME.US$ and $AMC Entertainment(AMC.US$ shares."
Regarding BBBY's all-time high net short volume and short position, @Mikebierer concluded, "Remember, if you own shares, you are not losing anything if you do not sell. The short side is losing money every hour. They need a lot of cash as collateral to maintain the short positions. And the higher the price and the longer we hold, the more they pay."
"Speaking of short selling, how can we not mention Tesla?"
Tesla is one of the most shorted stocks in the world, with almost 3% of its float held in short-selling positions. If you are interested in short selling, you can't miss out on $Tesla(TSLA.US$.
@Milk The Cow said, "My guessing is that it (the short volume) should be increasing for the more up to date data as I'd heard from news that Elon is selling many $Tesla(TSLA.US$ shares for maybe his $Twitter (Delisted)(TWTR.US$+ (Being forced to buy)? Short seller may use this chance to short $ $Tesla(TSLA.US$ ... ... I guess it's not surprising that $Tesla(TSLA.US$ short interest is low since the downward pressure on $Tesla(TSLA.US$ price is actually maybe cause by Elon selling his shares = not a measurement of short interest..."
"Other stocks are also receiving attention."
@JM investor shared some findings on $Invesco QQQ Trust(QQQ.US$ . "If we look on the short sales analysis during the period of November2021 to December2021 below, could you notice that the surge of daily short volume during these periods? Thus, based on the short sales analysis, we know that the daily average volume shown in the chart, is mainly short sale volume and the market sentiment is bearish! The daily short sale volume was also increasing from the first week of January 2022 towards the last week! So we know that, the sentiment of the market has shifted to the bearish."
As for $Helbiz(HLBZ.US$, @Alvinnnnnnn89 claimed it as "solid but not as good as expected , so still believe in ceo purchased and insider buying could bring something huge, waiting for explosive bomb dropped by ceo and break above $3."
As @Stocks with Josh stated, "shorts might be in trouble with $Skillz(SKLZ.US$ near term target easy 2.20".
@SANDRO 善子 shared views about $Roku Inc(ROKU.US$, "Intraday, Pre & Post Market graph shows the stock ( $Roku Inc(ROKU.US$) is declining smoothly due to Death+ appear on Long & Short MA (as shown in B). The stock normally will rebounce after hitting BB Lower ( as shown in B) and normally go up in Golden+ phase. Daily short volume is declining show the drop is due to moving phase( Death+) of the stock"
We've prepared rewards for mooers who shared the qualified posts! Rewards will be distributed in 7 working days from now.
In addition, we are glad to see that many mooers shared their ideas about how to apply the feature of short sale analysis. And we do hope this handy tool will help you judge the market sentiment and assist in decision-making. But please keep in mind that investment involves risks, and all the content above is for informational use only and is not a recommendation or endorsement of any particular investment or investment strategy.
Money never sleeps. The next round of Capital Analysis Events – Capital Flow is coming soon. See you next time! ![]()
Disclaimer: 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 content 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. 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.
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Mars Mooo :
Mars Mooo :
Mars Mooo : Apes together, STRONG!
mcstiner : its running around 8-9 dollars right now. If it rises, theres no telling what it could rise to... but if it goes bankrupt, the most you could gain is your sell price per share.
Shorting it is a dumb risk with limited upside... especially for a stock with high volitility and momentum... Shorting retail just before the holiday season?
ANTH0NY : Go ahead and short Tesla till your heart content..
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Velvet Monkey : Where's the story about Hedgefunds ability to short stocks behind the scenes with each other in the DARK POOLS? Asking for a friend.. Retailers don't get to do this right?
Since learning all about stock trading at Moomoo the last 19 months, this is one subject very interested in. 123 GO!
Velvet Monkey : $GameStop (GME.US)$ $AMC Entertainment (AMC.US)$ $AMC Preferred Equity Unit (APE.US)$ $Bed Bath & Beyond Inc (BBBY.US)$ $Tesla (TSLA.US)$
Shorting strategy called Dark pools.
Is it possible for new investors to learn that strategy? It's not mentioned in this article, or if I'm not correct, please show me where to find more information? Thank you Moomoo!
Red__Bull : The pertinent question here is which dip to buy. This goes for any investment. Buying a dip that subsequently goes lower for 6 months, then takes 6 months to return and go higher than your strike price is a year lost in opportunity cost for the money you invested. Managed portfolios is maybe the best example for this when they want you to have 97% in the market. They call cash "lazy money". Sideline cash is not lazy if you catch an opportunity to buy an undervalued investment if it rises 30% for example. My portfolio is always between 60-70% in the market and the rest cash. I can buy at any time without selling something first. It's also a good tax strategy. The proof that this works? I'm down about 8% YTD while the S&P is down 21%. with no complicated shorting, options, futures trading. Just buying and selling at opportune moments. I've crushed the S&P YTD, 1Y, 3Y, 5Y+. We'll see how that strategy works under 9% inflation. However, a 21% loss (S&P)+9% inflation is really a 29% loss vs a 9% loss in cash value.
Zaith :
lightfoot : my strategy is buy 100 shares, if it drops and continues short the stock with a put. Buy the Option or if the company is standing on solid ground and signs point to a come back, sell at a loss and buyback at the low costs to recover your losses by buying more shares to show a profit. it works for me just have to wait a little longer.
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