At PookieTheLion, we've done our best to create a Web site that anticipates and answers your questions. With that  in mind, we've compiled a list of frequently asked questions. If you do not find an answer to your question here, e-mail us at:  PookieTheLion@pookiethelion.com

QUESTION: What is a Short Squeeze?
ANSWER:    If a stock price starts to rise rapidly, the trend may continue to escalate because the short sellers will likely want out. They all head for the same door at the same time! For example, say a stock rises 20% in 10 minutes because of let’s say merger news , those with short positions may be forced to liquidate and cover their position by purchasing the stock “Buy to Cover”. If enough short sellers buy back the stock, the price is pushed even higher starting a major “Short Squeeze” and it’s painful and could cause major losses if you cant cover in time.

QUESTION:  How do I short a stock that I know is going to tank due to bad earnings; news or a pump and dump that’s over and tanking fast?
ANSWER: When you short a stock, you are essentially borrowing shares from your broker and that’s called “Selling Short”. You will return those shares when you “Buy to Cover” at a much lower price. You get to pocket the difference. Here‘s an example: Say you see very bad news for symbol “TANK” LOL!, you either select the symbol “TANK” and “Sell Short” 1000 shares from your online account or just tell your broker that you want to short 1000 shares of “TANK”: which is currently priced at  $7.23. The price falls to $5.00 a few hours later, and you decide not to hold it over night to avoid getting caught in “Short Squeeze” so you “Buy to Cover” at $5.00. You just made a profit of $2230.00 in a few hours. (1000 shares times $7.23 minus $5.00 equals $2230.00) Sounds to good to be true? It’s not, but the down side can be very painful and that’s why it’s called a “Short Squeeze” If the price per share (pps) had gone up to say $9.00 because let’s say more news came out driving the price higher. You just lost $1770.00 - Ouch!

QUESTION: What is a Gap?
ANSWER: A break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, a change in an analyst's outlook “Buy, Sell or Hold” or any other type of news release. Stocks that close at the High of the Day (HOD) usually gap up the next morning and the same is true for a Gap down or stocks that close at the Low of the Day (LOD)

QUESTION: What is a Breakaway Gap?
ANSWER: A term used in technical analysis (TA). A breakaway gap represents a gap in the movement of a stock price supported by levels of high volume. If you chart it, the gap reflects a bullish movement when the price has gapped upwards and a bearish movement when the price has gapped downwards

QUESTION: What does Earnings Per Share (EPS) mean?
ANSWER: The portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. Earnings per share (EPS) can be calculated by Net Income minus  Dividends on a preferred stock divided by the number of outstanding shares. There are more factors that can affect EPS, but this is the simple answer

QUESTION: What does the Price-Earnings Ratio (P/E Ratio) mean?
ANSWER: It is the market value per share divided by the earnings per share. For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43 divided by $1.95 equals 22.05).

QUESTION: What does Due Diligence (DD) mean anyway?
ANSWER: Origin of the term "Due Diligence"
The term "Due Diligence" first came into common use as a result of the US Securities Act of 1933. The US Securities Act included a defense referred to in the Act as the "Due Diligence" defense which could be used by Broker-Dealers when accused of inadequate disclosure to investors of material information with respect to the purchase of securities.
So long as Broker-Dealers conducted a "Due Diligence" investigation into the company whose equity they were selling, and disclosed to the investor what they found, they would not be held liable for nondisclosure of information that failed to be uncovered in the process of that investigation. The entire Broker-Dealer community quickly institutionalized as a standard practice, the conducting of due diligence investigations of any stock offerings in which they involved themselves. Due diligence in capstone refers to performing the needful amount of effort, as in 'doing diligence' Originally the term was limited to public offerings of equity investments, but over time it has come to be associated with investigations of private mergers and acquisitions as well. The term has slowly been adapted for use in other situations.

QUESTION: Your questions go here!
ANSWER: Any Questions? email: PookieTheLion@pookiethelion.com