AMD Short Interest Has Grown by 234% in Nine Months Reveals Data

Re:AMD Short Interest Has Grown by 234% in Nine Months Revea... by seoaeu on Saturday October 23, 2021 @01:26PM (#28970476)

In your example the bet is between A and B. If the price in a year is say $80 then yes A makes a $10 profit. But in that situation B loses the same amount: they started with $100 of stock, and a year later ended with $10 cash and $80 of stock. Conversely, B makes a profit if the stock goes down by anything less than 10%. This is a really good deal for B!

[ Parent | on HN ]

Re:AMD Short Interest Has Grown by 234% in Nine Months Revea... by ArtTimeInvestor on Sunday October 24, 2021 @06:04AM (#28976424)

    In your example the bet is between A and B

But that bet is not symmetrical. If B is of the opinion that the price will stay flat, it still makes sense for them to lend the share because they make a profit of $10.

So we have two participants:

    A thinks the price will go down.
    B thinks the price will stay flat.

Looks asymmetrical to me.

[ Parent | on HN ]

Re:AMD Short Interest Has Grown by 234% in Nine Months Revea... by seoaeu on Sunday October 24, 2021 @01:42PM (#28980202)

The bet is symmetric, but not around the current price:

    A thinks the price will be under $90 in one year
    B thinks the price will be over $90 in one year

Of course that doesn't explain why they chose $90. If A really wasn't able to find anyone willing to bet that the price would be above $95 or $99 or whatever (despite C wanting to buy the stock for $100!), that would be a signal

[ Parent | on HN ]

Re:AMD Short Interest Has Grown by 234% in Nine Months Revea... by ArtTimeInvestor on Tuesday October 26, 2021 @07:59AM (#28999266)

    that would be a signal

That is the point. The statement I made which sparked our discussion was "I can imagine a structure where shorts do signal an imbalance".

[ Parent | on HN ]