From Three Strategies Every Short Seller Must Know: 1. The Valuation Short To review,
From Three Risks Every Short Seller Must Know: 2. Capital Risk Because of the unlimited loss potential associated with short-selling, the
From Aggressive Stock-Picking: How to Squeeze the Shorts: A heavily shorted stock has the potential to soar on any positive catalyst, because so many investors are placing bets against it. This creates an opportunity for aggressive buying -- in other words, betting against the "shorts" that the stock will experience a short squeeze. Read the full article.
From How Do I Find Short Interest for a Stock?: Anyone who takes a short position in a stock is entering an interesting situation: In order to exit the position, he or she has to "cover" or buy back the shares that are being shorted. So if a stock has a very high percentage of its shares being shorted, it means that there are more investors who need to buy shares at some point, whether the stock goes up or down. This is interesting because those who have already taken a short position need those who own the stock (or are "long") to sell their shares and push the price lower. Read the full article.
From The Top Big Board Short-Squeeze Plays: Stockpickr has compiled Top Big Board Short-Squeeze Plays, a list of the heavily shorted stocks that trade on the New York Stock Exchange and have the greatest potential to rise based on their short ratios. One of the NYSE stocks with the highest short ratios is Alleghany ( Y), a property and casualty insurance company with a short ratio of 30.4. The stock has a trailing price-to-earnings (P/E) ratio of 10.6. Read the full article. Put your short and long stock-picking skills to the test with TheStreet.com's Beat the Street at beat.thestreet.com and you could win up to $5,000 every week.