Seeking Alpha

Shares of Herbalife (HLF) are getting a bump in after hours trade on the back of comments made...

Shares of Herbalife (HLF) are getting a bump in after hours trade on the back of comments made by trader Karen Fineman on CNBC's show Fast Money. Fineman suggested that it's possible that long holders like Dan Loeb could ignite a short squeeze by pulling their stock from margin. Shares +1% AH.
Comments (3)
  • Fast Money: Losing money, FAST.
    15 Jan 2013, 07:38 PM Reply Like
  • thats the kind of comment that usually marks tops
    15 Jan 2013, 08:16 PM Reply Like
  • Nah......this is the normal part of any good short trade.

     

    The original shorts do the homework and put the trade on.

     

    Then, every tom, dick and harry piles on.

     

    The 'longs' get sick of hearing the touts from the shorts, so they pull their stock loans.

     

    Huge buy-ins of the retail shorts results in a skyrocketing price. Easily a double. Sometimes a LOT more if it is a good corner.

     

    The longs sell into the squeeze.

     

    The original shorts were protected in a variety of ways during the buy ins.

     

    The original idea makers make a tidy sum, as the stock goes to zero.

     

    Of course, every situation is different. Sometimes it results in a standoff after all of the above. The longs won't sell; the shorts won't cover.
    15 Jan 2013, 08:25 PM Reply Like
DJIA (DIA) S&P 500 (SPY)