Cann American Corp (CNNA)

[Triple_Crown]

FWIW/FYI: Yesterdays Shorts 25.76% How shorting works.

Knowledge is a powerful tool.
Here with $BFLX we have some interesting dynamics.
Some of them unknown and some of them known.
The stock Promoter (PDGP) at some point will cash in his chips. Has he yet? Unknown.
The Company may be diluting, after all that is why a company goes public. Was yesterday a deluge of dilution? It is doubtful that a company would flood the market with shares to that degree. It is more probable that any dilution occurring was better governed than that, most likely on the way UP rather than on the way down. Still yet, Unknown
Were people shorting it? YES 25.76% of yesterdays volume was sold into it as short positions.

During the "bloodbath" as some have called it, I was watching Level 2 along with the streaming ticker of time and sales. It was more unusual than any I've seen. I alerted a group of the finest traders on the planet @ 10.00am to watch BFLX with this comment "BFLX may be being shorted or dilution, still looking for a bottom, L2 shows that when it starts to get a volume spike turn around, it then gets crushed down again".

In the first place; I'm only here because my Wile E. Coyote scanner picked up the action as BFLX was falling off the cliff. So I watched, waited, made some cleaver post (hehe), and when the Technicals started to indicate a reversal; I pounced. Oops, pounced to soon. so I watched, waited and pounced again to average down. "Oops" again, lol (not funny really). Until the AH NEWS I thought maybe I had fallen into pinkpoop. As it turns out; it is more likely that I will end UP smelling like a bed of pink roses.

So here is what shorting is and what it does to a share price.
AND the caveat is; I don't short, so if i get something wrong, be forgiving.
The main difference between taking a "long" position and taking a "short" position is: with a long position you need a share price increase to be able to have realized gains (money in the pocket) and with a short position you need the share price to go down to have realized gains.
So some time back I was wondering what a short looks like on level 2. A SHORT LOOKS LIKE A SELL.
So consider supply and demand in the free market. With less people selling the price of anything, in this case shares of
BFLX, will go UP.
If, on the other hand, there are many of something being sold, the price goes down.
A short position shows up as a sell because a shorter is essentially borrowing shares from a brokerage and selling them instantly. Later the shorter has to "cover" and that shows up as a buy.
So here is what I was seeing today (others posting saw it as well), the price was falling and as it would start to recover it was squashed back down with a flood of selling. I thought perhaps this was because of the "uptick rule" http://www.investopedia.com/terms/u/uptickrule.asp#axzz1oc8CAxqX however, even without an uptick rule, it makes sense that someone or several someones shorting would do so strategically. i.e. of course a shorter would pummel the upticks. It only fails when the longs exert more buying pressure than the selling pressure; such as in the case of a news driven buying frenzy (wink wink).

So according to FINRA's "REGSHO" list. on 03/08/12: 9,445,874 shares were short out of 36,664,562 shares traded. (see post 3336)
THAT's HUGE SHORTING.

So here is the good news for share holders: Millions of those shorts borrowed at the .22 and .20 range not knowing that NEWS was coming. This could force an early "short squeeze". Watch for the first hour volume to be huge and the demand on shares should drive the share price up.

Here is a quote from an informative page on The Motley Fool's website:

...What you are referring to, in investment parlance, is a "short squeeze." When a number of short sellers all try to "cover" their short at the same time, that does indeed drive the stock up.

Our approach when shorting is therefore to avoid in general stocks that already have a fairly hefty amount of existing short sales. We try to set ourselves up so we'll never get squeezed.

I'll point out that short squeezes can be the result of better than expected earnings or some other fundamental aspects of a company's operation. They can also be the result of direct manipulation. That is, profit-seeking individuals with large amounts of cash at their disposal can look on a large short position in a stock as an invitation to start buying, driving up the share prices, thus forcing short-sellers to cover. This in turn drives up the price, and before you know it, the share price has soared!

Here's to a green day. $BFLX