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I wouldn't assume the stock market is logical or rational. It's just a casino unless you're a huge player and can manipluate the market.
Good luck...
Scott
Just shorted some UAL stock, at 19.52
Yes, short-selling can be very dangerous, even when you have "fixed" the game. Some crooked speculators once bribed New York legislators to deny Cornelius Vanderbilt a crucial route authority, and simultaneously shorted stock in his railroad. Sure enough, the stock price fell like a rock, but the Commodore had his agents quickly buy up all the shares. When the conspirators tried to cover their positions, there was no stock to be had, except from Vanderbilt. He had them in a classic "short squeeze", and ran the price through the roof.![]()
Great story! The Vanderbilts - back when a billion dollars was a billion dollars!
Shorting is only as dangerous as your stop and the spread's volalility allow it to be. One caveat is that if you hold a position after hours, all bets are off. I will trade the pre-market but try hard to be in all cash at the close.