Elite Pharmaceuticals Inc (ELTP)

[reaper247]

ELTP could easily hit .50.

There may be arguments that can be made showing it doesn’t deserve to, but the risk of a big PPS gain based on news, rumors, promotions, etc are always possible on any OTC stock.

Even using the example of a “perfect short,” it shows a relatively small % ROI.

Sell to open 10,000 shares at $3.50 = $35,000 in premium.

Buy to cover 10,000 shares @ $1.20 = $12,000.

That $23,000 looks impressive until you understand its only a 65% gain.

Not even a double up.

Channel traders flipping 0001-0002 stocks are seeing better % ROI than fictional retail shorts in a “perfect short” example.

If that same stock saw just a 20% gain, the cover would be $42,000. That loss is greater than the total VAR.

You would need that $35,000 in cash, received as premium and then find an additional $7,000 to cover the difference.

That’s the simple version.

The risk reward ratio sucks.

My near “perfect” option contract could yield a 1000% gain in a single day, on a simple 10% move of the stock.


That play could turn the same $35,000 into $350,000 without the risk of losing more than the entire investment.

That’s why advanced traders wouldn’t participate in fictional OTC shorting scenarios that are prohibited by brokers, even if they could.

Once people understand simple market mechanics, the whole OTC retail short selling myth dies a quick death.

Hope that helps.

GLTU and the board.