Re: WPT Analysis (long)
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No. The problem with shorting is that (without using margin) you can only double your money and your potential losses are infinite. Even if you know a stock is overvalued, it's impossible to know when it will return to fair value. And it might double or triple while you wait.
It's like the internet bubble. There were stocks that were only worth $5, trading at $50. If you tried to short them eventually you would be right, but in the meantime they'd go to $200 and you'd be broke.
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Yes. The insiders and market makers will run it up if they see a bunch of retail shorting occur. And they WILL know it when they see it. As the poster said, it could go up after you short and then tank after you cover your losses.
Selling call options (not buying puts) at 20 and buying calls at 25 might be a way to go.
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