SIRI: is this a real short squeeze, or a trap?

[Option Trader]

For the sake of more clarity...

One side: This is the rare short squeeze, and the more buying, the more the shorts will lose, till the point they will have no choice but to cover at higher and higher prices?

Other side: All the shorts have to do (and probably that is what's happening) is let the price go higher and higher, shorting more and more, acting as if they are being squeezed, even if they let it go to $3- $5-- then bring it back to $1.00 once there is no more buying.

What do you think?

 

[Option Trader]

I think the majority of traders believe one can really squeeze the shorts and they lose, but it seems people have started to become more alert to the other side...

It would be nice to have more response.

 

[NoDoji]

SIRI has been in a steady uptrend since Feb 2009.

There's a short interest of 7%, not super high, but it makes me wonder why anyone would be short a really cheap stock where the risk to the downside is minimal and the potential upside is large? On May 3rd SIRI broke out of consolidation on high volume following an earnings beat. That's yet another long signal in a very clean uptrend. Buy the pullbacks.

It's not like they're losing money. There've been crappy companies posting loss quarter after quarter with really high (and valid) short interest, that have squeezed the shorts badly before tanking, sometimes into bankruptcy.

SIRI is not losing money; their earnings have been positive, their projected earnings indicate decent future growth. This is a really low risk long trade and a really high-risk short trade.

 

[Option Trader]

Look how SIRI went down from about $2.40 when I posted this, to $2.18 now, just a few trading days later...

 

[brownsfan019]

Quote from Option Trader:

Look how SIRI went down from about $2.40 when I posted this, to $2.18 now, just a few trading days later...

Wait, are you saying a stock moved since last Wed?

That's amazing.

I'm going to try this game - I think CL (oil futures, not Colgate) will move up or down from now till the next time I post in this thread.

You are welcome. Take that straight to the bank.

And my call will probably result in a much more significant % gain than this little siri stock.

 

[NoDoji]

Quote from Option Trader:

Look how SIRI went down from about $2.40 when I posted this, to $2.18 now, just a few trading days later...

It's in an uptrend. Buy the pullbacks. It'll be ripe and ready soon.

 

[efficiency]

Quote from Option Trader:

Look how SIRI went down from about $2.40 when I posted this, to $2.18 now, just a few trading days later...

Inter-day noise. As opposed to intra.


How many days to cover?


Out of total authorized, how much is outstanding?


Out of the outstanding, how much is floating?

Given the fact that most if not all mouse houses have a $5.00 threshold on shorting, it's safe to assume all short interest is institutional or well-heeled individuals.

Options are ancillary and only become an issue when (and if) assigned.


A short squeeze is better suited to being a by-product of being long rather than an intent. Might backfire.