Thursday, February 20, 2014 9:13:52 PM
When MM's shorts a stock, they will borrow the shares from your broker, wait until the price drops, buy the shares, then return the borrowed shares back and you will profit the difference. Here is an example:
Microsoft is trading at $30.00 a share. You think that the price is going to go down so you short 200 shares ($6000.00). You are borrowing shares of Microsoft from your broker at this high price of $30.00. Just as you expected Microsoft goes down to $20.00 a share.
You decide that you are ready to cash in, so you buy (called covering) the shares at $20.00. Your broker will now return the borrowed shares to the owner and you will profit the difference. Since you shorted at $30.00 and covered at $20.00 your profit is $10.00 a share on 200 shares - $2000.00.
If this all sounds confusing, imagine this scenario:
You buy a new plasma TV for $4000.00 and invite me over to see it. You say that you have to leave for the day and that I can continue to watch it. While you are gone, I see a commercial for the exact TV that has just gone on sale for $3500.00 - at the same place that you bought it!
So what do I do? I pack up your TV, grab your receipt, and take it to the store. I pretend that I am you and complain. The store manager gives me the difference between the price you paid and the sale price - $500.00. I return the TV to your house, pocket the $500.00, and you never knew what happened!
It is the same thing with shorting stocks.
From a traders perspective, all of this happens behind the scenes. You just simply log on to your account and click the sell (or short) button and you have just shorted the stock (your broker borrowed the shares from someone else). When you are ready to cover, you click the buy (or cover) button and your done.
MM'S= MARKET MAKERS-EG-(NITE),(CDEL),(ATDF)(ETRF) OR INDIVIDUALS WHO WORK FOR MM'S CAN SHORT PENNY STOCKS.
DAMN SHORTS WILL HAVE TO COVER THIS WEEK.BE STRONG INVESTORS-IT IS GOING TO PAYOFF BIG TIME.
SHORT SQUEEZE COMING SOON>>>>>>>>>>>>$$$$$$$$$$$$$$$$$$$$$$$$$$$$
$$$>NO MORE MORTGAGE PAYMENTS,NO MORE CAR PAYMENTS,NO LOAN PAYMENTS, JUST HAPPINESS.$$$<<<
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