Does anyone trade these types of stocks? I have read that the theory is that these stocks can make big moves to the upside as the shorts cover. In some cases there are stocks that have over 50% of the outstanding common shares shorted. That seems really high. The low float stocks to me would probably not be something I would do, the volume of those stocks is ultra low, like with Penny Stocks Anyone do this? I guess in my case I would buy Calls that are just at the money or slightly out of the money. http://www.highshortinterest.com/
Lots of people saying this about SNAP right now. Low float isn't the same thing as low volume or low liquidity. Calls are probably a losing game on this unless you're also playing the tend...since the possibility of a squeeze is factored into the premium (plus your likely to hold a winner because the price move that made a winner wasn't the short squeeze you're looking for). Oddly enough, I just opened a (tiny) position on SNAP today.
yeah,, the thing on options is the deflating value as expiration approaches. some of these just have so much short shares outstanding. I guess the question is how the heck do you pick out the ones to play. This is for sure more of a swing trade type thing.
I wouldn't go searching for one, but every now and then one falls in your lap...I'm a perma-bull though, some bears might have more insight on this...or someone who has seen more. I've only every been on the losing side of one of these.
with criteria you mentioned listed options are not likely to exist. if they do exist the options will likely have low volume like the stock, with wide bid and ask spreads.
And SHLD, FTR, FSLR (or was it another solar company?)...I'm trying to recall all the companies I've kicked off my list over the years.
Or 30% of shares outstanding. And when prices were hovering in the 20s, there were 18% short...as my beer addled mind recalls.