hard to borrow question
- Thread starter cashclay
- Start date
No.
It just means there aren't a lot of shares to borrow
A long term holder owns a lot of the stock, they may not want to lend it out.
Or there could be a corporate action which might encourage holders to not lend out their stock (like a special dividend or a stock election).
thank you
Yes good assumption. But the chances on any smaller stock which is not the in main popular stock index has like a 90% chance of underperforming. And 40% go bust. So yes, the chances to take short positions on them are higher in tendency. If you want to examine a good short strategy then you could research on reverse splits. Those stocks are good to short because they tend to go lower after reverse splits. Just to make an example. And they usually are also hard-to-borrow. You can also backtest this I think with Portfolio123 website (as gold standard here). I would give a 1 month shot here to know the results what you have said if I were you.
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what you said could be true, but as i have 250 stocks in my portfolio, i watched very closely those with HARD TO BORROW, has more bearish sentiment and tend to fall further, since many people have shorted it , there are no much shares left for shorting .. Please Tell me If it's otherwise ?
It could also mean that the stock is overvalued and smart money is shorting it.
Individual stocks: anything can happen. As a group they should underperform.
