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Behind the Markets Podcast: Alejandro Lopez-Lira

Behind the Markets Podcast

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The Constraints of Shorting That Makes Smaller Stocks Harder to Predict

There's this funny pattern that you always observe that smaller stocks are way easier to predict regardless of the method. Now the reason I think that's happening is mostly because their cost is costlier to trade. So it's less worth for like really large hedge funds to trade on these smaller stocks just because they would have a high price impact mechanically.

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