View Poll Results: Did you buy shares ?
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- 12-11-12, 07:40 AM #1101
Well, RIM needs to pump out 5M units in the first 60 days and maintain more than 1M BB10 units each month thereafter just to keep the lights on. That'll be 15M units for the launch year. To me, 20M units is still on the low end. On a four year replacement cycle, which is generous, they don't end up growing their subcscriber base. I think 20M being a success is based on not running any discounts on hardware, which will be impossible considering US budgetary policy will have an impact late Feb and European austerity measures starting to impact Asia.
- 12-11-12, 04:28 PM #1105
It seems the shorts continue to add to their short position trying to keep it down while RIMM which IMO is GROSSLY undervalued and only under $13 due to short manipulation(meaning they sold shares they don't own and have to buy it back). The shorts are going to hang themselves... 113,000,000 shares are now short up from 105,000,000
Research in Motion Limited (RIMM) Short Interest - NASDAQ.com
Last edited by mrfreetruth; 12-11-12 at 04:38 PM.
- 12-11-12, 05:11 PM #1109
1. what does 'short' mean in this context? I thought short meant, selling your shares. But then somebody mentioned 'they sold shares they don't own and have to buy it back' - now what does that mean? How can you sell without having it? And why do you HAVE TO buy it back?
2. what does 'short squeeze' imply? How does it propel share price upwards?
3. what does 'short panic' imply? Is it same as short squeeze?
4. what do you mean, shorts are going to hang themselves?
5. what is the implication of '113,000,000 shares are now short up from 105,000,000' ?
- CrackBerry Abuser
12-11-12, 06:01 PM #1110
- 409 Posts
Short Selling: What Is Short Selling? | Investopedia
That's a good link to learn about short selling. I recommend investopedia.com as a go to source to learn about anything to do with investing.
- 12-11-12, 06:09 PM #1111
normally you first buy shares in hopes of the share price increasing and then you sell later.
a short trader will sell first and hope for a price decrease and buy back later.
you get a squeeze when the share price jumps and shorts start to buy back to limit their losses, all at the same time.
- 12-11-12, 06:38 PM #1112
When an investor goes long on an investment, it means that he or she has bought a stock believing its price will rise in the future. Conversely, when an investor goes short, he or she is anticipating a decrease in share price.
Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept. (To learn more, read Benefit From Borrowed Securities.)
Read more: Short Selling: What Is Short Selling? | Investopedia
- 12-11-12, 06:48 PM #1113
Thanks! Got it. So, '113,000,000 shares are now short up from 105,000,000' means that 113M shares were borrowed (from broker) and sold (by traders/borrowers). And now these traders (borrowers) are obligated to buy them back so they can repay their lender/broker. Whoa! That's a lot of shares! I only have couple of hundreds!
"shorts are going to hang themselves" so I see, it just meant that a lot of traders who shorted are going to suffer losses. I thought the phrase 'hang themselves' meant something in trading lingo.
- CrackBerry Addict
12-11-12, 09:36 PM #1114
- 963 Posts
As I said before that rim stocks almost doubled in last few weeks but short interest keep rising so is there something longs do not know or shorts are committing suecide. Interesting, more bullish sentiment and more shorts for the stock. It does not make sense, I sold all my longs today but will be buying on next dips for sure. I am bullish until March for sure.
- 12-11-12, 10:02 PM #1115
- 12-11-12, 10:34 PM #1117
Wait a second guy, help me understand this: so, shorting means that the trader sold borrowed shares (hoping the price would go down) and is obligated to buy them back (to repay the lender). Then... if there are 113M shorts as of today .. shouldn't the price have gone down? I mean, if so many shares are being sold (shorted), should it not result in over-supply?
Does this mean the demand for RIM shares has increased so much that even with "short" shares flooding the exchange, the price continues to go up?
Because these short-sellers are obligated to buy equal numbers of shares back, then that should result in even MORE buying. So, the organic demand + demand created from 113M shorted shares should drive the price even higher in coming weeks?
- CrackBerry Abuser
12-11-12, 11:13 PM #1119
- 288 Posts
Ok, I have a question . I understand the principle of short positions, but here is what I would like to know........ Is there any way of finding out when the short positons were taken? Obviously some were taken as the stock price was lower , but how many were taken when the stock price was higher than it is now ?Where can a person find this information ? Thanks
- 12-11-12, 11:16 PM #1120
Exactly. Also, if the price continues past a certain point a short seller is forced into a Margin Call where the seller must liquidate their short position in order to staying within margin. Meaning they have to buy shares which further drives up the price, unless they of course choose to cash fund their margin to keep the short position.
- 12-12-12, 12:14 AM #1121
There are numerous reasons one can be short a stock. I could be long XIT but short RIM. I could be short rim and long a call. You cannot infer that someone who is short will be subject to a margin call. With large numbers in the millions it is safe to assume some are naked short, but you can't be entirely sure what percentage is naked (straight up borrow.)
Also, if the stock does not appreciate in value, then shorts have no impetus to buy back their borrow. The net effect is the stock remains oversold and therefore depressed.
A big short report does not indicate a stock will go up, but instead it indicates upward movements will be accompanied by large volatility.
If I sell something now only to buy back later, there is minimal effect on stock price overall. But you do not know if one will buy back before you need to sell.
Now that $12 resistance appears to be broken (optimistic anticipating view - say we need a good week above 12 to claim that)
Let's target $15 and then ... try to break the 52wk (one year) high. If this appends after Quarter reports, then I believe we might expect big ...
Also, more and more articles with positive returns as in "they will finally make it".
It Was Another Big Day For RIM - Yahoo! Finance
Last edited by Superfly_FR; 12-12-12 at 06:55 AM.
- CrackBerry User
12-12-12, 06:14 AM #1123
- 59 Posts
I think shorting can also be done as a way of having insurance for the stock u buy. From About.com :
When options are traded as insurance (also known as hedging), they protect the underlying trade by limiting the amount of potential loss. This maximum loss of the options trade that will become the maximum loss of the underlying trade, replacing the potentially unlimited (or at least much larger) loss of the underlying trade.Trading options as insurance can be very useful, but many traders (especially buy and hold traders) do not understand how options insurance works, and therefore do not use it
- 12-12-12, 07:58 AM #1124
If you see a trend thay the stock price is going up, then by all means you should profit from it. I'll add my two cents, don't hold a short term play through a quarterly report unless you are confident the news will be strong one way or another. There is normally opportunity to reestablish a position shortly after at more favorable prices.
That said, I'm no investing genius, so talk to a professional.
- CrackBerry Abuser
12-12-12, 09:00 AM #1125
- 131 Posts
Let's say there are 500MM shares of a company. If you want to buy a share, someone has to sell - the number of shares out is 500MM. If you short 125MM shares, you borrow from a broker, sell to someone who doesn't know they are borrowed - now the people hold 625MM shares. This is dilution - it devalues each individual share - not the "same" as going long. But what RIM should do is pay a dividend - let's say $0.20 per share. It would cost RIM $100MM. But the people who bought the stock that was shorted expect a dividend too. So the shorters would have to pay $25MM. The loyal RIM shareholders would be getting$125MM and it would only cost RIM only $100MM. Seems like a good deal to me. Also, there is no point in shorting shares if you own any. The insiders, Prem, the big institutions are not shorting, because why would you pay to borrow stock to sell when you have stock sitting there. So of the 525MM shares of RIM, I would guess that 400?MM shares are held by longs and a big chunk of those would not be margined. That leaves 125MM shares floating. Normally, (according to TD Bank) you can only borrow stock from a margined account (not from RRSP or Corp.) Let's say you have a 1000 shares of RIM at your broker and have no margin (not borrowed money in the account to by stock). They will not lend your stock to a shorter. Once you go into margin (borrow), the broker feels that he owns a portion of your portfolio and is free to loan your stock out. So I don't know where those shorters are finding all that stock, but it's very dangerous. If the big boys went into a margin position, the brokers could lend their stock, then one day just sell that stock to another account or ask for the stock certificates (paper) and all shorts have 3 days to cover. Shorters have to buy 125MM shares from people who don't want to sell. When Porsche went after VW.... Google it - here's a portion:
Hedge funds claimed "short squeeze" on Volkswagen shares
* Porsche won dismissal of lawsuit by a trial judge in 2010
* Appeal focuses on U.S. high court ruling on foreign conduct
By Grant McCool
NEW YORK, Feb 24 (Reuters) - Federal appeals judges on Friday honed in on whether a U.S. Supreme Court ruling limiting securities fraud lawsuits barred a $2 billion case by hedge funds accusing German automaker Porsche SE of fraudulently cornering the market in Volkswagen AG shares in 2008.
Germany's Porsche won dismissal of the lawsuit in December 2010, when a trial judge in New York said 32 hedge funds, including Elliott Associates and Black Diamond Offshore Ltd, could not pursue the $2 billion lawsuit.
It was one of the best short squeezes of all time. Come on RIM shareholders....you've been getting kicked in the teeth for 2 years by these shorters....time to fight back!!!
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