Welcome to the Cannabis Investing Newsletter Forum. Feel free to find your favorite cannabis stocks and contribute content as you please; content that continues the discussion of and analysis of cannabis stocks. – D. H. Taylor
short interest report from otsshortreport.com
I think the lack of regulations makes it possible for competitors to short competitors shares or hire someone to do it, which can cripple the competition, force them to sell company dirt cheap!
If insiders have to file and disclose and there are regulations/restrictions when they can do it, I think the same thing should be for short selling at the very least.
Insiders are restricted when they can buy and sell shares, and I think that should be for short sellers too, especially if they are bashing the stock on social media or paying people, that should be disclosed so people know the motivation.
@cannabis-investing Yes, but… the long run fundamentals will outplay these short-minded players.
Can someone explain succinctly what shorting means and how it negatively affects stock price? I,m not clear exactly what is being done when shares are shorted and why it affects value. Thanks
@nortonkingmanyahoo-com Yup... I can do it.
A stock trader can short a stock. What that means is that they place a bet that the stock is going to go lower. What they do with stocks is they "borrow" someone else's stocks and they sell those stocks at the market price. The first person still owns the stocks but, the short seller puts in a sell order. If the price of the stock goes lower, then the short seller would profit when they exited the trade. At the same time, the person that owns the stocks would see a decline in value in their portfolio. So, this is a way to capture price movement.
At the end of the day, or period, the short seller has to cover their position. They would buy back the shares they shorted. So, in essence, they are creating a new type of stock for that period of time. Remember, the person who owns the initial shares always owned them; they never sold their position. Plus, the company did not issue new stocks. The only thing that happened was a short seller created a fictional stock trade that took advantage of price moevement. And, they always have to get out, or "cover" their positions.
If stocks suddenly surge, then the short seller may be required to add more money into their brokerage account to pay for whatever they lost. If stocks go higher, the owner of the stock is gaining value. But, the short seller is losing. If there is a surge in price, you will see a ton of short-sellers buying back their positions. This actually pushes stocks much higher, much faster, a la, February's price surge.
We are all kind of waiting for this to happen. And, when it does, it'll happen in the blink of an eye.
Thanks. I guess the part that is confusing to me is that they don’t actually own the stock they are selling. Anyway, as I understand it, the shorting itself does not necessarily affect the price either way? It’s just the mad scramble to replace them if the price rises that could potentially drive the price much higher, possibly artificially. And the more shares shorted, the madder the scramble would be?
@nortonkingmanyahoo-com the short seller would actually sell shares he does not own into the market. He sort of borrows the ability from the brokerage. Imagine he has no shares in MRMD. He can sell short 100 shares. He would then have, in effect, -100 shares. He would buy back 100 shares and be back to zero.
I noticed that 75% of shares sold yesterday (11/19) were short sales. Can someone tell me why traders would take a risk in a stock this strong? I thought the goal was to single out weak companies and take them down. One reason that comes to mind might be that the recent share unlock suggest that there will be a lot of selling taking the price down , and maybe these short sellers are riding along as the price drops with the sell off. These short sellers are doing very well; I don’t think they are stupid.
@mebarrettyahoo-com You are absolutely right. The people shorting aren't stupid they know what they are doing. I too was looking at the short interest, but on the CSE( cause Cannabis is legal in Canada) and the top 8 heavily shortest companies are all Cannabis....Now too me that's a massive broad sector short. Please use link below...