WKHS - Workhorse has a "short interest" of 42%...
WKHS is similar to GME and AMC because the short interest is high.
A high short interest can cause a "short squeeze".
For example, shorts borrow shares from a broker for a fee. The shorts sell the shares (that they just borrowed) on the open market which not only creates a profit but also pushes the stock price down.
(This is possible because people buy shares and don’t set limit orders).
*This is why it is important to set limit orders high so that shorts can’t borrow your shares.*
Shorts make money by selling the shares back to the broker at a lower price as well as making money through buying put options.
A "short squeeze" happens when shorts have to buy back their shares that they borrowed from a broker at a higher price.
For example, if we buy WKHS at “market price”, such as $13.00, it will cause the stock price to go up at which point shorts will need to cover their "short" positions or risk being margin called which means that the broker can automatically close out the short's position which will cause them to buy back those shares at “market price” which is often much higher then when they borrowed them.
So, let's just say that 42% of the shares are currently being shorted.
This means that 42% of the shares outstanding will need to be bought back when the price goes above a certain point.
For example, if a hedge fund takes out a short position for 100,000 shares of WKHS at $15.00/share with a price target of below $8.00/share and the price goes up to $100/share then the hedge fund would be forced to buy back those shares that they shorted for $100 each which equates to $100,000,000.
This is how it is possible for hedge funds to lose $5 billion dollars in one month similar to the hedge funds that lost a lot of money "trying" to short GME and AMC.
(Due your own research)
Good luck,
Diamond Hand Ape
P.S. Please "like" this post so we can get it trending.
