Bioelectronics Corp (BIEL)

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PT, Reg SHO uses the term "Short Sales" but no investors shorted 83 million shares of BIEL today. It is a Naked Short, selling shares one does not own or borrow, by one or more Market Makers. I use the term "Fail to Deliver" because it more accurately describes the consequence of selling something that you do not own.

OTC transactions are not between a Buyer and Seller, they have a middleman. When you Buy or Sell BIEL you sell to and buy from a Market Maker. MMs can sell as many shares as they want at a particular price even if they do not own or borrow the shares under the guise of making a market. There is very little in the way of consequences to worry about when MMs Naked Short.

Some will tell you that it is the company diluting the stock, authorizing an MM to sell "x" number of shares and supplying the shares within a few days. Others say that it is manipulation of the stock price by the MMs to allow themselves larger profits. Either way when 50-80% of a day's trading involves the selling of phantom shares that do not exist it can stop a rally dead in its tracks.


"Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "failure to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker settles the trade."