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Re: Hilander post# 135

Wednesday, 07/18/2007 2:05:21 PM

Wednesday, July 18, 2007 2:05:21 PM

Post# of 2151
Short Interest - Investopedia:

Short Interest - What Does It Mean?
http://www.investopedia.com/terms/s/shortinterest.asp
• The total number of shares of a security that have been sold short by customers and securities firms.
• Short interest is typically expressed as a percentage. For example, 3% short interest means that 3% of the outstanding shares are held short.


Days To Cover:
A measurement of a company's issued shares that are currently shorted, expressed as the number of days required to close out all of the short positions. For example, if a company has average daily volume of 1 million shares and 2 million shares are currently short sold, the shares have a cover rate of 2 days (2M/1M).


Short Interest Ratio - What Does It Mean?
http://www.investopedia.com/terms/d/daystocover.asp
• Also referred to as the "short-interest ratio".
This ratio is somewhat unique because it measures the future buying pressure on a stock that is virtually certain to happen - short sellers must buy back shares at some point if they are to close out their positions.
• If a stock's price begins to rise significantly, investors who have short sold the stock will quickly begin to close out their positions (by purchasing shares off the open market), creating buying pressure for the stock and driving the price up even more. If a previously lagging stock turns very bullish, the buying action of short sellers can result in extra upward momentum and increased losses for short sellers who are slow to close out their positions. The longer the days to cover, the more pronounced this effect can be.

More on Short Interest Ratio:
http://www.investopedia.com/terms/s/shortinterestratio.asp
• A sentiment indicator that is derived by dividing the short interest by the average daily volume for a stock. This indicator is used by both fundamental and technical traders to identify the prevailing sentiment the market has for a specific stock. Also known as the "short ratio".
• This ratio provides a number that is used by investors to determine how long it will take short sellers, in days, to cover their entire positions if the price of a stock begins to rise. The short interest ratio can also be applied to entire exchanges to determine the sentiment of the market as a whole. If an exchange has a high short interest ratio of around five or greater, this can be taken as a bearish signal, and vice versa.


Short Covering - What Does It Mean?
http://www.investopedia.com/terms/s/shortcovering.asp
• The act of purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price.
• Also referred to as buy to cover or buy back.
• For example, suppose a trader has sold short 50 shares of ABC stock at a price of $10.00/share, because he speculated that ABC will not be successful in the near future. Unfortunately for the trader, the company has been recently very lucky and its price rose to $15.00/share. In order to limit his losses, this trader decides to cover his short position by buying back the 50 short sold shares at a price of $15.00/per share.


Short (or Short Position)
http://www.investopedia.com/terms/s/short.asp
1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
2. In the context of options, it is the sale (also known as "writing") of an options contract.

Opposite of "long (or long position)".

1. For example, an investor who borrows shares of stock from a broker and sells them on the open market is said to have a short position in the stock. The investor must eventually return the borrowed stock by buying it back from the open market. If the stock falls in price, the investor buys it for less than he or she sold it, thus making a profit.
2. For example, selling a call (or put) options contract to a buyer entitles the buyer the right, not the obligation to buy from (or sell to) you a specific commodity or asset for a specified amount at a specified date.


Weak Shorts - What Does It Mean?
http://www.investopedia.com/terms/w/weakshorts.asp
• Refers to the group of investors who hold a short position and are quick to exit their positions at the first sign of strength in the underlying asset. This group of investors looks to capture the gain on a move lower, but they are usually unwilling to take on as much risk as other investors.
• Weak shorts differ from other traders because they will close their position at the first sign that it will move against them. It is not uncommon for this group of investors exit a position only to see the asset move to a price that would have made the trade profitable if they had left it open.



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