Many noobie investors always post about shorting sub-penny stocks - it isn't economically feasible.
Let me guess the information comes from the OTCshortreport - which reports short volume and not short interest.
You really need to research the trade cycle, margin accounts, the $2.50 rule and the difference between short volume and short interest.
Call your broker and ask to borrow 1 million shares of BMXC to short - he will ask if you have $2.5 million in your margin account (most penny stock investors have a cash account).
Then you have $2.5 million in dead money in your margin account and you only control $4900 in BMXC stock.
If BMXC goes to 0.001 you have made $3900 minus transaction and margin account fees but you have tied up $2.5 million while waiting for the price to drop to 0.001.
Here is a primer on the mechanics of shorting a stock - which certainly isn't illegal - but noobie investors post about shorting on every OTCM scam.
First, you have to borrow shares from your broker to short (and sell them on the open market) - then you have to buy the shares back at the lower price and return the borrowed shares to your broker. Let's say the price is $1 per share. So if you sold at market price you would receive $1 million.
If you brought the shares you owe your broker 1 million shares at $0.75 - that would be $750,000 - then you return the million shares to your broker and your profit is $250,000 minus margin and transaction fees.
If you look at the FINRA bi-weekly report you will find that in the 2 weeks prior to August 31st the short interest was only 3,868 shares and more importantly there was ZERO FTDs.
IG
