The Perils of Shorting: A Real Life Example

James Kirk said:
960. up 180. After yesterday I thought I'd seen it all. It's gunning for 1000
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I can see the parallel/temptation between the current price and the effort to be the first to trade oil at >$100 a barrel a few years ago (I think trades were manipulated at the time). Who knows where it'll stop?!?
 
$875. Just like that, billions come off the market capitalisation just as the market closes. What happened 5 minutes before the end of the trading day?!?

More importantly, where is the popcorn? Must be material here for a second Wall Street sequel!
 
Hi James

I set my stop at $1,100 in my head.

I set it at $900 in practice with a view to increasing it if necessary.

Unfortunately, I was distracted by other issues today and it went through that without me noticing and I was closed out automatically.

It's clearly a mad bubble at the moment.

But I have lost my allotted amount or near enough to it, so I have to think about whether I want to allocate more.

Brendan
 
rob oyle said:
$875. Just like that, billions come off the market capitalisation just as the market closes. What happened 5 minutes before the end of the trading day?!?
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Watch out this stock is going to get clobbered , no stock goes parabolic and stays there it always ends in tears. You can see the market is getting nervous , obviously some big shareholders have taken their profits. I think alot of the Tesla shareholder are too young to have experienced the dot com crash or even the financial crash. In fairness I doubt anyone on this thread has big money riding on Tesla
 
jhegarty said:
No , with the volume traded I don't think this is a short squeeze. Tesla traded 58 million shares yesterday, room for each short to leave 3 times.

A real short squeeze is where there is no room to leave.
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Really? And it's not the shorts buying the shares that are in any way driving the volume?
 
RedOnion said:
Really? And it's not the shorts buying the shares that are in any way driving the volume?
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There is definatly short coverting going on. I can only imagine how many margin calls and stop losses triggered over the last week.

But a short squeeze only happens when there is more shorts looking to buy then sellers looking to sell.

I think there may have been small squeezes at $700 and $750 on Monday. But since I haven't seen one.
 
I'm curious what the option prices are for TSLA. Is there a site that shows up to date bid and asks? Or do I need a trading account somewhere?
 
shipship said:
I'm curious what the option prices are for TSLA. Is there a site that shows up to date bid and asks? Or do I need a trading account somewhere?
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The options trading has been wild on this stock!
 
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SPC100 said:
https://en.m.wikipedia.org/wiki/Short_squeeze is this what's happening?

Unwinding shorts causing way more demand than is available? Someone mentioned a very significant volume of stock was traded.
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It looks very like it. The example given is Volkswagen which went from 210 to 1000 in two days, making it the most valuable company in the world. It is now at 172.
67% of IG punters in Tesla are short, way higher than in other more normal stocks that I looked at. Surely there can be no doubt that this surge in price is not driven by a reassessment by the market of the fundamentals but by the technical requirement of shorts to cover as well as reduce their positions, just as described in the wiki link. Tesla has to be a screaming short at these levels, if only I had the nerve.
 
I have put in a stop loss at $800 in the hope that I can retain some of my sanity.

My breakeven is at $320 , so will still be a good profit.
 
I've decided to follow closely the stock so took out a short position yesterday evening at $926.

Of course, this is betting, not investing - let's see what happens.
 
This thread has 21k views not sure how many are unique views but I would imagine that there are a lot of people who have followed the lead and shorted Tesla , I think it shows that askaboutmoney is right not to allow specualtion on individual share prices as a general rule.
It also shows the bais we carry around with us , your mind looks at the price and thinks it has to stop now , but it doesn't have to do anything it could hover at 900 for a few years now until Tesla are huge and then go to 4000 or it could go to zero tomorrow . It's a coin flip where it goes from here.
 
Tesla stock price is down almost 15% so far today!

You really couldn't make it up.
 
Fella said:
…….It's a coin flip where it goes from here.
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Absolutely. This is betting. So far so good. Tempted to cash-in at $160 a share profit. My hunch is to let this current gyration run for awhile. This is mad stuff.
 

Brendan yours is a tale of "the perils of shorting " if ever there was one.

Find a stock you believe is ridiculously over valued. Short it with a stop that's even more ridiculously high. Watch your cash evaporate as over 3 weeks the stock rises just beyond your ridiculously high stop for a couple of hours before falling back to earth (maybe). Thankfully your position was small and not so painful. Of course there is someone on the other end of this that just bought at $900 where the "pearls of buying" stock could make a good tale now as well.
 
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