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Inteliquent, Inc. Message Board

  • vesper27 vesper27 Feb 16, 2010 8:39 PM Flag

    Short squeeze

    20% of float is short, which will be exacerbated by the buy back announced on the call. Company announces guidance in line with (reduced) expectations. New service coming on-line and not included in guidance.

    It's going to be an interesting month.

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    • guys. i am long on tndm but still a newbie investor when it comes to the options. can someone explain what this poster means when he says a short squeeze is coming? what causes it? what does it foretell? any help would be appreciated thanks.

      all i know is that the price didn't reflect what this stock was riding at a couple of months ago, and the explanation for the bad ride down was pretty weak.

      • 2 Replies to mown68
      • Mown, I would recommend as a resource while you're learning. Type in any term and it will give you a definition and explanation. Then go through all the fundamental terms on your stock summary page and learn them. Also, read their general explanation articles; they're very helpful for novices.

        You've picked a good time to begin investing, or trading. And you need to know the difference.

        Good luck.

        (p.s., shorting or short squeezes are not directly related to option trading.)

      • Shorting means borrowing shares to sell. One makes money by selling high and replacing the shares at a lower price. Someone who does this expects the price to drop. To pocket the profit someone who is short must replace the borrowed shares by purchasing them back.

        A short squeeze is when people who are short run en mass to cover their short positions, meaning they are buying shares to get out of their position. A short squeeze is good for longs, it means upward pressure on the price. The way TNDM traded today puts a lot of pressure on shorts to cover their positions, hence the talking about an impending short squeeze. With 20% of float short out there, that means that there could be a pretty intense short squeeze.

        I'd be very nervous if I was short this stock as it seems to be gaining upward momentum.

        Hope that helps :)

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