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Re: Chiugray post# 11113

Friday, 05/23/2014 5:29:09 PM

Friday, May 23, 2014 5:29:09 PM

Post# of 817983
Hi chiugray - posted this on yahoo too:

I don't think this plan is going to work (as much as I'd like it to) and here is why.

One - if you have a margin account - but haven't borrowed money from your brokerage - they cannot short your stock. At least that is the case at Charles Schwab.

However, if you owe ANY money - meaning you've borrowed from your broker to buy a stock or options or anything, they can short your stock.

If you do ow, and you put a limit order in on NWBO, it does not lock the stock up. The stock has to be SOLD by you first before the brokerage firm needs it. Charles Schwab will sell your shares but if the supply of the stock is low AFTER you sell the stock, Charles Schwab will then go to the short and say, you must exit your short position as you can no longer borrow those shares because we had to sell them. They are no longer available to borrow.

So if we all put limit orders in, and they actually kick in, then the stock value will go down because we are all selling our stock.

The only way to fight a short is to buy more stock; or do not borrow money from your brokerage to buy stock - because once you owe the brokerage - you are officially on margin and they can use your stock.

And depending upon the collateral the short has on hand - meaning how much his/her account is worth, they may never have to buy - they just wait it out. Of course, the interest rate will go up for them. And depending upon how much stock they shorted and how far their position up from where they sold it - what they owe their brokerage will be increasing.
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