KKD and a Short Squeeze?
Thinking of picking up some KKD--it is at 9--based on the following
MSN Money report. You can make a killing in the market when a frantic rush to cover shorts inevitably pushes a stock's price higher. This is called a
short squeezeOver the next several days, don't be surprised if some stocks spike on no news. The driver may be a Securities and Exchange Commission crackdown on brokers who've bent the rules on short selling. The textbooks tell us that investors short stocks -- or bet against them -- by borrowing shares and selling them. Later, these investors hope to buy the shares back and return them to the lender at a lower price, pocketing the difference.But some investors have been skipping the borrowing part, and their brokers have let them get away with it. This is known as "naked shorting," a big no-no for regulators. The SEC has been devising a crackdown for months, known as Regulation SHO... making clients buy stocks they've sold short In other words, there may be a rush to buy about now... the most aggressively shorted stocks also have big naked short positions...we looked for stocks on the naked short lists with the biggest short positions relative to their market capitalizations. From that list we took the stocks with the biggest short positions compared to average trading volume, a factor that may add to upside moves in these stocks since this makes it harder to buy shares to cover naked short positions.
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