Even with a short selling attack, it increased tenfold … The Park Eui-myung fire ant rescue team that destroyed the big hands
November 19, 2021
Entry 2021.11.19 10:16 p.m.
Edited 2021.11.19 10:41 PM
Photo = Getty Images Bank.
To ants, short selling is more than fear. This is because most of the stocks that are being sold short have plummeted. For many it was a painful experience. Since short selling resumed in May, regular ant stocks like Celltrion and Seegene have been cut in half from their highs.
Photo = news 1
However, there are stocks that continue to rise after being attacked by short selling. L&F, EcoproBM and Wemade are the main characters. Hundreds of billions of won in short sales were focused on these stocks, but their stock prices rose three to ten times. It is estimated that short sellers have suffered enormous losses.
Below are the Korea Exchange’s internal statistics obtained from Yoon Sang-hyun’s Bureau of the People’s Empowerment Council. This data shows each investment firm’s trade amount and ranking of short selling from May to October 18, when short selling resumed. You can also find out which stocks these investment firms have shorted the most.
Source = Yoon Chang-hyeon’s office
If you look at the photos, you can notice that some elements appear frequently. EcoproBM was targeted by seven investment firms. It is said that most brokerage firms that like short selling have them targeted. Firms A and H sold 142.2 billion won and 134.5 billion won respectively to EcoproBM alone.
However, the population has more than tripled. The share price, which was around 170,000 won at the beginning of May, rose to 546,500 won (closing price on the 19th). If you short at 170,000 won and hold it this way, the loss rate is 221%. If you sell 100 billion won short, it means you have a loss of 200 billion won.
Domestic G Securities is also a hot topic in the industry. Company G sold 41.4 billion won empty to Wemade, and the share price rose from 25,000 won in early May to 237,000 won in six months. The rate of increase is almost 850%. L&F was also sold short, but the share price tripled.
Cases from three disciplines are unlikely. Still, it’s worth paying attention to. Because it shows the consequences of choosing the wrong target for a short sale. In fact, news often circulates in Yeouido of short sellers who have lost their lives due to a single mistake.
Photo = Internet photo
“Security actors” say the hardest part is short selling to make a profit. This is due to the structure where the probability of losing is greater than that of winning. If you short the stock at 10,000 won, the expected return is up to 100%. If the stock plunges 99% and the stock price is 100 won, a profit of 9900 won will be generated.
But the loss is infinite. If the 10,000 won share becomes 100,000 won, the loss is 90,000 won. Even if the share price doubles, the loss is 100%. A securities industry official said, “You cannot short individual stocks without strong trust.”
Experts recommend that in order to make money, you need to understand the psychology of short investors. From the perspective of short sellers, it is important to choose stocks that are unsafe. A securities industry official said, “It’s difficult to keep short selling stocks that have good news or are expected to rise.”
It deals with the news of the Yeouido Exchange and the stories of ants. appears every Saturday. By subscribing to the press page below, you can receive articles without missing out.
By Park Eui-myeong, employee reporter [email protected]