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kbdavis

08/06/14 8:22 PM

#35624 RE: The Gentle Wolf #35606

He is a short seller. He borrows shares of XUII from his broker, sells them high, and when the price drops he "covers" what he borrowed and returns them to his broker.

Example
He shorts 100 shares @ $5 per share.
He just sold $500 worth of stock he doesn't own.
He talks s|-|it about the stock he shorted, in hopes to scare people. This does two things... First, it created liquidity so it will be easier to "cover" because there will be a lot of people wanting to sell (due to fear). Secondly, because there are a lot of sellers (more selling than buying; aka demand for the stock goes down), it will drop the price per share down.
Now when he thinks it has hit rock bottom he will cover, let's say at $1 per share. So he buys back the 100 shares he sold short cheaper. 100 x $1 = $100.

He returns the shares to his broker, while he keeps the $400 in profits.

What does this mean for the rest of us? Listening to this annoyance all day long. They post crap all day to influence people to sell their shares to artificially drop the price.

While we all profit when the stock goes up, short sellers profit when it goes down. And short selling has unlimited risk so they are so persistent on these boards and copy and paste all their crap all day long to scare the actual investors out of their investment.

All I got to say is these short sellers bs doesn't phase me at all. You shouldn't let it phase you. Do your own research and use your own DD when making you purchase and selling decisions. Don't listen to all these yahoos.