![]() ![]() This is what happened earlier this year when traders as a group decided to take on professional sellers by buying a lot of shares of heavily shorted stocks, including, most famously, GameStop Corp. The buying pushes the share price higher, making short investors accelerate their attempts to cover, which sends the shares spiraling higher in a frenzy. Short-selling is when an investor borrows shares and immediately sells them, hoping to buy them back later at a lower price, return them to the lender and pocket the difference.Ĭovering is when a person with a short position buys the shares to return them to the lender, to profit if the shares have gone down in price since they were shorted, or to limit losses if they went up after being shorted.Ī short squeeze is when a mass of investors looking to cover short positions start buying at the same time.
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