Loading ...Im far from being an expert on how the “selling short” game works ( I left the trading floor 15 years ago). GDX is definitely a rigged game. No one will ever know the true number of outstanding shares. But a clearing company ( like a Spear Leads or First Options Corp.) might be notified by a stock holding company, that one of their clients ( a trader on the floor) needs to buy back a certain number of shares and deliver them back to the holding company. This usually happened in stocks with a small number of outstanding shares ( or what’s called a small “float”). A small speculative company that’s in the news could be propelled much higher by pure rumors. If people doubt it, they’ll sell the shares short. But with a very limited number of outstanding shares, buy-ins occur quite frequently. It’s part of the reason why ZH talks about a short squeeze in some of the most speculative, highest shorted stocks.
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