LEND is a highly liquid stock it trades $30,000,000 worth of shares each and every trading day. Unless you are going to be short more then $5 Million dollars worth of this stock, you are not going to have any difficulty moving in and out of your position very quickly, literall within seconds.
You can’t get “trapped” in a short-squeeze. You could set a stop-limit to exit LEND say on a close above 60 (which would be a new closing high) and then you have limited the amount you could lose regardless of what the stock were to do.
This is NOT a short term trade and is driven by a fundamental proposition. My thesis is that I believe LEND is going to go out of business due to a rapidly detiorating housing market. If the evidence that supports that thesis changes and the housing market turns back up, then I will exit the trade. If the evidence continues to support my thesis I will continue to increase my short position. I’m looking to be short LEND for at least 12 months, possibly longer.
I’ve got a lot of dry powder in my capital accounts and I will stick with my thesis until its fundamentally proven wrong.
Lets check back on LEND in 3 months and see how things are doing.
