Monday, July 25, 2011

Rick comments

Rick Ackerman, who I consider to be one of the premier trading gurus out there and runs his own trading site commented on my post:

No reason to assume the shorts are “naked,” David. Their positions could easily be offset by puts and calls. In any case, shorts are always vulnerable to a squeeze, especially when there are fewer or no certificates around to borrow. So many certificates are held in “street name,” however, that this is seldom a problem.
But you – acting alone – could probably stir up enough muck to reduce the supply of borrowable shares sufficiently to put the squeeze on these wise guys. I’ve seen option-expiration plays where call sellers were forced to buy stock in the cash market for instant delivery. GORO might trade for twice its “market” price under such circumstances.
I added emphasis to Rick's last line.

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