Wednesday, July 05, 2023 7:26:57 PM
That isn't close to being accurate. All shares in the float aren't available to borrow for shorting that is complete nonsense.
"I just wanted to clarify that, You said there are not 4 billion shares to short. Hypothetically every share in the float can be rehypothecated or lent out an unlimited amount of times, so more than 4 billion shares can be shorted."
Brokers can't borrow shares from a Cash account - they can only borrow from a margin account. It is obvious that you don't understand how shorting works.
Shorting isn't for the novice investor - you also have to take into account the $2.50 rule - which says for every share borrowed that is below $2.50 you must have $2.50 in a margin account that can't be moved until the open short position has been closed.
So if you borrow 1 Million shares of Mullen at $0.10 you have to have $2.5M in your margin account. That is why very few OTC investors have shorted a stock.
Then there is a borrow rate on the stock borrowed to short - then there are margin maintenance fees.
With shares held in Cash accounts - they can't be borrowed for shorting - so there isn't 4 Billion shares available to short.
According to Fintel there are 1.6 Million shares available to borrow for shorting. Although I don't believe Fintel as they are always high on all things shorting. So the number is probably lower than 1.6M.
I hope you now understand that there isn't anywhere close to 4 Billion shares available for shorting.
IG
"I just wanted to clarify that, You said there are not 4 billion shares to short. Hypothetically every share in the float can be rehypothecated or lent out an unlimited amount of times, so more than 4 billion shares can be shorted."
Brokers can't borrow shares from a Cash account - they can only borrow from a margin account. It is obvious that you don't understand how shorting works.
Shorting isn't for the novice investor - you also have to take into account the $2.50 rule - which says for every share borrowed that is below $2.50 you must have $2.50 in a margin account that can't be moved until the open short position has been closed.
So if you borrow 1 Million shares of Mullen at $0.10 you have to have $2.5M in your margin account. That is why very few OTC investors have shorted a stock.
Then there is a borrow rate on the stock borrowed to short - then there are margin maintenance fees.
With shares held in Cash accounts - they can't be borrowed for shorting - so there isn't 4 Billion shares available to short.
According to Fintel there are 1.6 Million shares available to borrow for shorting. Although I don't believe Fintel as they are always high on all things shorting. So the number is probably lower than 1.6M.
I hope you now understand that there isn't anywhere close to 4 Billion shares available for shorting.
IG
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