Replies to post #15729 on Red Cat Holdings Inc (RCAT)

[investor2004]

What happens is they are very powerful well funded hedge funds and large sophisticated investors that I believe bypass brokers all together and deal directly with the clearing houses. But, they often borrow the shares from the brokers since retail is the ones who own much of the float typically. What they do is buy back little by little REAL shares to cover older shorts while at the same time using new borrowed shares to push the price down at the same time they are doing this. Many times they are selling these shares to themselves just above the bid or just below the ask. They do this over and over again when they are trying to shake shares loose like they have been for weeks trying to eventually have a net gain in real shares to cover the whole short without losing their shirt by just buying the shares. The also extend it out hoping the market will cool off eventually and they will have an opportunity they can totally cover the full short position. If they are not able to do this, or there is a PR drop that spikes it up in this situation, then they must cover to protect their short, they are forced to buy all and cover the shares immediately. This is called a short squeeze since it adds to the drive up on the stock pushing it up even further then it would be organically just with the current spiked demand for the stock!

This is all done with highly advanced AI so the bids and asks are changed and altered and bought and sold so fast through multiple market makers that we as humans have no way actually grabbing those "passed" shares they use to manipulate price down and can not buy fast enough walls of shares on the ask before they disappear! Have literally had days trying to beat it buying shares where I have bought a total of 1-5 shares when there was 5-10k sitting on the ask! Its Crazy. Hopefully that make sense. Been watching this stuff play out on level 2s on tons of stocks for years. But does make you wonder doing that how much of our current volume is real at this point and not just passed shares. Gives you an idea with looking at the naked short report.