On the day before ChangXin Technology went public, someone emptied 2.9 million shares at $6.5. Later, the share price moved to $8.6 and the market cap rose above RMB 4 trillion. After all this, the biggest short finally couldn’t hold on and cut.
The paper loss is about $10.84 million, but what really stings is that $5.24 million of it is financing funding fees—nearly half the losses weren’t driven by price moves at all; they were worn down by time.
The most underestimated cost in shorting is this: even if the direction is right, you pay for your positions day by day. Even a sideways market can grind people down. The stronger the underlying stocks and the more funding-fee-heavy the market, the more expensive the shorts’ time cost becomes.
The paper loss is about $10.84 million, but what really stings is that $5.24 million of it is financing funding fees—nearly half the losses weren’t driven by price moves at all; they were worn down by time.
The most underestimated cost in shorting is this: even if the direction is right, you pay for your positions day by day. Even a sideways market can grind people down. The stronger the underlying stocks and the more funding-fee-heavy the market, the more expensive the shorts’ time cost becomes.