Long-Short Ratio

  

Categories: Derivatives, Trading

See: Long/Short Equity. See: Long/Short Fund.

How long do you, um, want to be? Ok, nvrmnd on that one.

Instead, think about yourself as a hedge fund manager who is supposed to deliver positive returns when the market is up 2, 5, or 20%...or down the same amounts.

So you have to figure out how long you want to be—like...how bullish are you about your company names and/or the overall market itself? And same deal for your shorts. This quarter, who is gonna be awesome? Who’s gonna suck? And by how much?

The ratio reflects the number, or this level of belief in the wrestling match of positivity and negativity.

A given fund is long $300 million in QQQ, a NASDAQ-y index fund that’s very liquid. They’re short $200 million of MSFT because they think MSFT is gonna perform way worse than the overall tech index. Their long/short ratio is 3/2, or 150%.

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Finance: What are short cover and squeez...7 Views

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intended to fit onto that body yeah that would be squeezing the shorts in in Wall

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hundred million shares and averages trading of three million shares a day

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the stock will go down in price and then sells it so yeah that's how it works

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they essentially borrow securities from the brokerage with whom they've set up [Stock transfers from brokerage to hedge fund]

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the short selling arrangement those shares get sold at whatever price

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they're trading out at the time that the short sales happen the hedge fund then

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waits until the stock falls to its target price hoping that it actually [Cancer B Gone stock price falls]

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falls and doesn't go the wrong way at which point it then buys back the stock

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more cheaply delivering it back to the brokerage and booking what is you know

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down well in horror the hedge fund watches as the stock climbs from 80 to

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82 to 85 to 90 with the fund all the more sure it's worth 10 bucks a share

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share times the 10 million in shares it shorted and remember it

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there in those shorts being SQUOZE is uncomfortable like this uncomfortable [Man in tight pants in a changing room]

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