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Discussion in 'News' started by All Your Bases, Sep 12, 2015.
Tesla Motors Inc (TSLA) Has Ludicrous Lead on Rivals
Yes, good piece.
At the end the author says "Full disclosure: I’m long TSLA".
What does "long TSLA" mean?
The intent is to hold the stock for a long time. To me, it means through any ups and downs. There are "weak" longs who panic and sell when it drops. Others just decide to sell and take their profits when they can.
He is not short TSLA lol
It means he owns stock in Tesla
And Is betting it will go up
Beat me by a Minute
Don't worry. It has nothing to do with body parts. Owns the stock.
A bit more on this stock speculation jargon:
"Long TSLA" means he owns the stock (and, therefore, hopes it will go up in price).
"Short TSLA" means he sold borrowed stock, in the hope that it will go down in price and that he will be able to buy it back later at a lower price and make a profit. "Shorting" a stock is a bet that it will go down, which leads to:
"Short squeeze" refers to a situation where a stock that has a lot of "short interest" (many speculators who have sold the stock "short") goes up in price. This can lead to short speculators getting nervous because they are losing money and want to cover their bets by buying the stock back to close-out their short bets. That, in turn, causes the stock to go up some more (often quite sharply) leading to even more losses for remaining short speculators. Sometimes a sharp rise in stock price is due, in part, to short speculators getting "squeezed" like that and being forced to cover their positions to limit losses. Short speculators can face unlimited losses if the stock rises in value, whereas long buyers of the stock face only the loss of the cost of their stock, if it goes to zero.
So, "shorting" a stock is seen as a risky speculation unless one "knows" that a stock is going to go down. It is pretty much akin to gambling, as is buying the stock to speculate on quick moves in price. Both are quite different from "investing", which is buying a stock, or group of stocks, in the hope that it will increase in price over many years from growth in the company's earnings or growth in the economy.