[WarmWash]

But the act of selling (and shorting) puts downward pressure on the stock. Those buyers are buyers at a lower price, not a higher one (like you would find in a stock with lots of buyers).

That's why saying "most shorted stock" is saying something and "every seller has a buyer" is not.

[quantummagic]

Yes, stocks go up and down; hardly revelatory. The point, regardless of the imprecise wording of my alternate title, remains. There are people who think they are getting a valuable investment, at the price short-sellers are willing to sell at. There's just as much optimism as pessimism about the stock, at that price. And that's my complaint about the title, it wants to only highlight one side of the trade -- for narrative reasons.

[WarmWash]

>There's just as much optimism as pessimism about the stock, at that price.

No, there isn't, because the price breaks in the direction that there is more optimism or pessimism. When the pessimists run out of optimists at $135/share, they start digging for them at $134/share. The price ran out of optimists and had to move down to find more. Otherwise the price would lock at a single point.

And abundance of pessimists indicates that a lot of "downward digging" is taking place, it's very relevant.

You're hyper focusing on the tree here and missing the forest.

[quantummagic]

People respond to market forces. When they see that there are other people making irrational valuations, they may wait to buy even lower. It's not a judgment about the intrinsic value of the stock at the current price, but of opportunities in the market.

It's still a hard fact that for every single trade, there is someone as fully optimistic, to perfectly match the pessimistic side. And people have to be pretty committed to a narrative to deny that fact.

[WarmWash]

Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".

[quantummagic]

No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight.

Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at some price) to put their money where their mouth is, that the people betting against the stock at that price are wrong.

But at that point they're both just making bets.. all it says is that there are an equal number of dollars willing to gamble at that price point. It says nothing about which side of the gamble will win.

Shorts don't exist in a vacuum. They literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price. I don't know why you have such a hard time facing up to that fact, even after you admit it is one.

[WarmWash]

> Every trade is proof that the market thinks the stock is a good investment at that price.

And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.

So to climb out of this nullification, we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.

[M3L0NM4N]

> No, you're working very hard to miss the point.

It seems the opposite is true here.

> [Shorts] literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price.

Again, this isn't true. The spot price has to decrease from the point where short-selling is happening for there to be a willing buyer, unless there is a new bid. Yes, transactions happen at one singular price, but if you're only saying that every seller has a buyer and every buyer has a seller, then the guy that you replied to is correct. What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.