Posted on 10/28/2008 9:01:36 AM PDT by TigerLikesRooster
I love it when short sellers take it in the shorts..
Ping!
More hedge funds will explode and burn with this...:-)
I pray Soros was shorting them.
Good comment - we can hope!
Why?
GS rumored to be short and is doing the circle of fire thing today.
I don't get out much - what does "circle of fire thing" mean...
When you short a stock, you effectively borrow stock from someone else and sell it -- with the hope that you can eventually buy that stock at a lower price and pocket the difference.
However, if the price rises significantly after you have shorted the stock, it can trigger a margin call. You either have to come up with more money, or buy the stock at a higher price to close out the position.
If a lot of people have shorted a particular stock, a sudden jump in the price creates an artificial high demand, for a brief period. Short sellers scramble to buy the same limited number of available shares, and it pushes up the price. It's known as a "squeeze", because as the stock continues to rise, more short sellers get margin calls, and the cycle feeds on itself.
most frustrating thing is as far as I can tell there is no ADR to speak of in the US to do anything with this amazing price distortion.
Ticker VLKAY, volume so far today is about 200k shares.
I’d be careful tho’...
thanks, i actually pulled that up with 3 other pinkies under the vw name, but volume was even lower then. i guess they don’t want to list on a us exchange and just have pinksheet adrs...
That's the US ticker for the American Depository Receipt (ADR). VW trades in Germany mainly.
All five letter tickers that end in "Y" are foreign, and not Canadian. Canadian stocks that aren't fully listed in the US have a five letter ticker ending in "F". Mutual Funds have an "X" at the end...
Yes, he was asking for an ADR...
Both sides are speculating and attempting to manipulate the market. The only question is who gets to set the price at settlement.
A temporary fluke, but nonetheless pretty amazing that this is a company whose only assets were a pile of rubble 63 years ago. Most amazingly, VW was put back in business by the British, who needed cars for their occupation forces in their zone of Germany.
“IMO - Short sellers are scum sucking bottom feeders that make money off the misery off legit investors and add no value to the business or society - but that’s just my opinion.”
There is a difference between LEGITIMATE short selling, which actually provides liquidity to the market, and “naked” shorting, which is perfidious. When you legitimately short, you borrow a share from your broker, sell it into the market, and hope to buy it back lower. Nothing wrong with this, you are buying lo and selling hi, just in reverse order.
The immoral part of shorting comes when the SEC lets Market Makers and brokers “naked” short, by never having to track down the original share to sell short in the first place. They just “make it up” and sell it. They are supposed to account for the shares they sell short within 48 hours (I think that is the timeframe) but no one pays any attention to it at all. The SEC has busted many brokerages just shorting the hell out of stocks with company funds, with no shares being called. Etrade in a rather famous admission regarding their short position in GLKC, when audited by the SEC and asked where they came up with the shares to short, simply said “we are hopelessly short.” The evil thing about this is that they were not even seriously fined.
Brokers, hedge funds, market makers, banks, all kinds of big financial operators simply “sell” stuff they don’t have. This is equivalent to counterfeiting stock and the people who do it should go to jail.
Again, it is our “conservative” president who is in charge of the Treasury, which has oversight over the SEC, the most worthless, corrupt organization outside of the US Congress I have ever seen.
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