support at five dollars?

Discussion in 'Trading' started by futurecurrents, Sep 9, 2002.

  1. Since it seems that most retail traders cannot short stocks below five dollars then it should follow that there would be some support at this level. Has anyone noticed this? I'm considering making a new rule for my trading to not short stocks close to $5 for this reason. Perhaps this phenomena (if it exists) is exploitable..... Thoughts?


    "I believe we are on an irreversible trend toward more freedom
    and democracy - but that could change."
    - Dan Quayle
  2. Counter-point:

    At the same time you might have a valid reason to believe that because a stock is unshortable that would abate some of the selling pressure, you have large, behemoth mutual funds that are trying to salvage anything that is left and liquidate...After all, these guys have a hard time explaining how they rode stocks from $50 to $2...

    Either way it could work depending on your time frame....