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Re: laraz5 post# 66781

Friday, 12/09/2022 2:51:17 PM

Friday, December 09, 2022 2:51:17 PM

Post# of 67190
THERE ARE NO SHORTS HERE

"Click-Bait" sites like otcshortreport intentionally misrepresent regsho "volume" as "naked shorts", to attract attention, generating advertising "clicks" for themselves.

People learn the difference between short VOLUME and short INTEREST.

Short "Volume" vs. "Interest"...Or.."Why Short Volume's Meaningless "

Short "Sales/Interest": The number of shares borrowed and sold "short", with the hope of buying back at a lower price. Not yet covered, ie, "Open" "interest" or "positions". FINRA reports this twice per month here: http://otce.finra.org/ESI (OTC)
Would be nice if it were more frequent, but that's all we got.

Short "Sales/Interest" Example: Investor 'A' borrows 1,000,000 shares, sells them, then hopes the stock goes down. If it does, Investor 'A' buys back the shares at a lower price, returns them to the lender, and keeps the price difference (minus fees & interest). FINRA reports the # of "open" shorts, those not yet bought back & returned.

If the stock goes up, the investor will lose, and the broker may force them to cover, possibly at a huge loss.

Daily Short "Volume" (regsho): Intraday volume Market Makers transactions when they temporarily short a stock for a couple of seconds or a minute to fill an order in a timely manner, then cover a couple minutes later (otcshortreport lies and calls this naked shorts). Meaningless number because it's just the first leg of a transaction reported of filling orders. Completely unrelated to short interest. This number can often be quite high for thinly traded stocks, thus more likely to get hyped as shorts, even though it's not.


Psssst. That's part of MM's job..."Making a market". Ensuring liquidity and timely processing.

Short "Volume" Example: 1,000,000 buy order comes in. MM doesn't have 1,000,000 handy to fill the order, so quickly shorts 1,000,000, fills the order for the customer rather than keep them waiting. Then after taking a sip of coffee, covers the temporary short.

Now, lets say that happens 10 times today, for a total of 10,000,000 shares, short "Volume" is 10,000,000, but at EOD, it doesn't result in any short "positions" or "interest" because they were all covered right away.

The next day, someone sees the 10,000,000 short "volume" and talks about 10 MILLION SHORTS YESTERDAY .....

Short "Volume"s MEANINGLESS... Who cares what hoops MMs had to jump through to fill orders during the day ?

"Click-Bait" sites like otcshortreport intentionally misrepresent regsho "volume" as "naked shorts", to attract attention, generating advertising "clicks" for themselves.

Using "Volume" (regsho) numbers is like going to the bank,
Depositing $100,
Withdrawing $100,
Depositing $100,
Withdrawing $100.....
Repeating 10 times, then saying "I deposited $1000 in the bank today", when the account is actually $0 because deposits and withdraws cancel out.

Risk-Reward: The risk-reward is the opposite for "shorts", compared to "longs". Shorts have a max gain of 100% if the stock goes to $0, but losses are infinite, if the stock goes to-da-moon.
Plus, brokers require $2.50 per share deposit in a margin account to protect them against losses in penny stocks.

"Doing the Math" of risk-reward, plus fees and margin requirements shows shorting penny stocks to be financial nonsense 99% of the time.

Math Example: Shorting 1 Million shares at $.0003 = $300 maximum gain if stock goes to $0. Margin requires $2.50 per share, or $2,500,000 deposited in your margin account. Show-stopper right there for most people.
That $2.5 Million is to protect the broker if there's a price spike, meaning that amount is at risk.

THAT MEANS YOU WOULD NEED TO HAVE $2,500,000 IN A MARGIN ACCOUNT, PLUS THE COST OF THE SHARES TO SHORT 1,000,000 SHARES OF GSFI ALL TO POSSIBLY MAKE $300 IF THE PPS GOES TO ZERO THE NEXT DAY.AND NOBODY IS GOING TO DO THAT.

The saddest lessons of history is this: If you have been conned long enough, you reject any evidence of the con. It’s too painful to acknowledge, even to yourself, that you have been taken. If you give a charlatan power over you, you never get it back.”

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