Drone Services USA Inc. (DSUS)

[Cassandra]

There has been no "shorting" of PVEC stock by market makers (MMs) or retail investors and there will be no short "covering."

MMs do not "short" penny stocks. As part of making a market, they may have periodic short positions throughout a trading day if they fill buy orders for more shares than they have in inventory, but they also often have inventory when they fill sell orders. Having an inventory does not mean that they are going "long" any more than having a temporary net short position is "shorting." This kind of temporary short position is legal and necessary for efficient trading.

Market makers (MMs) stand ready to buy or sell quoted securities according to their bid and ask quotes regardless of whether they have offers on the opposite end.

The grey market shows how trades work when MMs don't make a market. Because MMs are not allowed to make a market in grey market stocks, buys and sells have to be matched with both volume and price. The grey market is extemely inefficient.

This article explains why retail traders don't short penny stocks: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79347899 The margin requirements are prohibitive.

This excellent post explains why the FINRA daily short data does not show true short positions and that the bi-monthly report is the only reliable one. It also explains that when new shares are entering the market, they are reported as short until the stock is delivered. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=63945167

The short data for all OTC stocks including those quoted on OTC Markets (fka Pink Sheets) is sent to FINRA twice a month by broker/dealers. FINRA compliles it and publishes a semi monthy report. These bi-weekly reports show the aggregate short postion by all market makers as of that settlement date.

The PVEC bi-weekly (semi-monthly) reports show no significant aggregate short postions. They can be found here: www.otcmarkets.com/stock/PVEC/short-sales or by entering the ticker on the OTCBB short interest page: http://www.otcbb.com/asp/OTCE_Short_Interest.asp

Explanation from FINRA (contact information for questions is included): http://www.otcbb.com/asp/OTCE_Short_Interest.asp

OTC Equity Short Interest

Overview
FINRA Rule 4560 (formerly NASD Rule 3360) requires FINRA member firms to report their short positions on all over-the-counter (“OTC”) equity securities to FINRA. Once the short position reports are received, the short interest is then compiled for each OTC security.

Effective September 7, 2007, then NASD Rule 3360 was changed to require firms to increase the frequency of short interest reporting from monthly to semi-monthly cycles. Please refer to the Short Interest Reporting Deadlines for the current reporting schedule.

The mid-month short interest report is based on short positions held by members on the settlement date of the 15th of each month. If the 15th falls on a weekend or another non-settlement date, the designated settlement date will be the previous business day on which transactions settled. The end-of-month short interest report is based on short positions held on the last business day of the month on which transactions settle. The reports must be filed by the second business day after the reporting settlement date. The short interest data is compiled and provided for publication on the 8th business day after the reporting settlement date.

Publication Schedule
Semi-monthly short interest information will be available on this site after 4 pm ET on the Media Date. (See schedule in link).

Short Interest Data
OTC equity short interest is available for view by issue, or by downloadable pipe-delimited text file containing all OTC equity securities reported with a short position. Data is available online for one rolling year and is based on the settlement date provided in the Publication Schedule above.

Data Definitions and Contact Information
Data Field - Definition

Security Name = Name of the security

Security Symbol = Symbol identifier

OTC Market Type = Indicates whether the security is OTC Bulletin Board or non-Bulletin Board

Current Cycle Short Interest = The total number of shares in the security that are reflected on the books and records of the reporting firms as short as defined by SEC Rule 200 as of the current cycle's designated settlement date.

Previous Cycle Short Interest = The amount of shares that were reported as being sold short for the previous cycle

Change in Shares Short from Previous Cycle = Difference in short interest between the current cycle and the previous cycle

Percent Change from Previous Cycle = The percent change from the current cycle's short interest compared to the previous cycle's short interest.
Formula: (Current Cycle Short Interest - Previous Cycle Short Interest) / Previous Cycle Short Interest, x 100, Rounded to Hundredths.

Average Daily Share Volume = The daily average share volume reported for the security during the current cycle

Days to Cover = The number of days of average share volume it would require to buy all of the shares that were sold short during the reporting cycle.
Formula: Short Interest / Average Daily Share Volume, Rounded to Hundredths. 1.00 will be displayed for any values equal or less than 1 (i.e., Average Daily Share is equal to or greater than Short Interest). N/A will be displayed If the days to cover is Zero (i.e., Average Daily Share Volume is Zero).

Questions regarding OTC equity short interest data may be directed to the Legal Section, Market Regulation at [phone], or Office of General Counsel at [phone].

http://www.otcbb.com/asp/OTCE_Short_Interest.asp