Friday, October 02, 2020 6:22:59 PM
I feel certain that most OZSC investors don't understand how shorting works. My guess is most people who post about sub-penny stocks being shorted are using short volume from penny stock pumping sites like OTCshortreport.
It is not “prohibitive” just because of the Regulatory Requirement of Maintenance Margin of $2.50 per share, although it certainly puts a huge damper on the size of position you will take. But then there are also fees associated with it, the interest alone makes it a very short term proposition at best and the fact the broker may pull the position at anytime without your approval makes it quite risky. But the real problem is the “locate”, unlike exchange traded securities there are no “institutional accounts” to borrow against, in fact it only leaves margin accounts to borrow against and Financiers with large Block Positions that give permission to borrow against their position. Contrary to popular Ihub myth, CASH ACCOUNTS CANNOT BE BORROWED AGAINST!
When a MM doesn't have the stock in his own inventory, he has to mark the trade "short" even though it is 99.9% of the time covered within seconds with a corresponding trade or from his own customer. Ironically, stocks that have large amounts of toxic death spiral convertible debt usually have the highest daily short volume percentages, because the MM is selling stock all day and only at the end of the trading session to they acquire the stock from their toxic convertible debt holding client. Which means at the end of the day short interest is zero because all the trades marked "short" during the day by FINRA regulation have been covered. Not a single share of short interest remains at the end of the day.
A good example is 1 million shares at .0007, that will cost $700 for the principle and $2.5 million in maintenance margin, depending on the broker the interest and other fees will likely run 20% of your take home if you effectively short to .0001. The gain is capped at 99.9%, wow… so a whole $699 made off of that risk and all that money tied up for days and paying fees you end up with $550 or more…. Yeah shorting is not a lucrative business in the OTC. Oh and did I mention the losses are not limited, they are infinite.
Short volume is meaningless - it is short interest that you are looking for - using BS sites like shortvolume.com and OTCshortreport are worthless.
Those sites use FINRA Daily Reg SHO data, it is meaningless on it's own.
The Trade cycle is Trade Date plus 2 days for settlement, Daily Reg SHO only shows the Initial leg of each transaction and doesn't reconcile based upon settlements made seconds later as the trade has yet another 2 days to settle.
Also, check the FTDs (Failure to Deliver) it is Zero.
Why don't you post your DD to prove that OZSC is being shorted?
IG
It is not “prohibitive” just because of the Regulatory Requirement of Maintenance Margin of $2.50 per share, although it certainly puts a huge damper on the size of position you will take. But then there are also fees associated with it, the interest alone makes it a very short term proposition at best and the fact the broker may pull the position at anytime without your approval makes it quite risky. But the real problem is the “locate”, unlike exchange traded securities there are no “institutional accounts” to borrow against, in fact it only leaves margin accounts to borrow against and Financiers with large Block Positions that give permission to borrow against their position. Contrary to popular Ihub myth, CASH ACCOUNTS CANNOT BE BORROWED AGAINST!
When a MM doesn't have the stock in his own inventory, he has to mark the trade "short" even though it is 99.9% of the time covered within seconds with a corresponding trade or from his own customer. Ironically, stocks that have large amounts of toxic death spiral convertible debt usually have the highest daily short volume percentages, because the MM is selling stock all day and only at the end of the trading session to they acquire the stock from their toxic convertible debt holding client. Which means at the end of the day short interest is zero because all the trades marked "short" during the day by FINRA regulation have been covered. Not a single share of short interest remains at the end of the day.
A good example is 1 million shares at .0007, that will cost $700 for the principle and $2.5 million in maintenance margin, depending on the broker the interest and other fees will likely run 20% of your take home if you effectively short to .0001. The gain is capped at 99.9%, wow… so a whole $699 made off of that risk and all that money tied up for days and paying fees you end up with $550 or more…. Yeah shorting is not a lucrative business in the OTC. Oh and did I mention the losses are not limited, they are infinite.
Short volume is meaningless - it is short interest that you are looking for - using BS sites like shortvolume.com and OTCshortreport are worthless.
Those sites use FINRA Daily Reg SHO data, it is meaningless on it's own.
The Trade cycle is Trade Date plus 2 days for settlement, Daily Reg SHO only shows the Initial leg of each transaction and doesn't reconcile based upon settlements made seconds later as the trade has yet another 2 days to settle.
Also, check the FTDs (Failure to Deliver) it is Zero.
Why don't you post your DD to prove that OZSC is being shorted?
IG
Get ready scammers. Hell is coming to breakfast.
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