Stockpickr
Top Investment Broker Short-Squeeze Plays
Stockpickr Staff
07/29/08 - 11:56 AM EDT
Updated from 7:59 a.m. EDTThe recent SEC emergency order against naked short-selling in the stocks of investment brokers and commercial banks may create some attractive short-squeeze opportunities.
A short squeeze takes place when a stock's short-sellers cover their positions quickly when good news boosts the price of the stock. This short-covering often drives the stock price even higher. The metric for measuring short-squeeze plays is the short ratio, which represents the number of days it would take a stock's short-sellers to cover their positions based on the stock's recent average daily volume.
With this in mind, here at Stockpickr, we've come up with a list of the top investment broker short-squeeze plays. The portfolio includes KBW(KBW Quote) and optionsXpress Holdings(OXPS Quote).
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A note from James Altucher: Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap. Here are some examples:
- Stocks related to drilling the Marcellus Shale
- MLPS with yields above 7%
- Microcaps trading for less than tangible book
- Stocks that do well after Hurricanes
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