Well, let see the common sense in that. Lets see the mathematics of it.
You short $100,000 shares at $.005, but given the rule about having to put up the money like if the stock was at $2.50, meaning that you are putting up the funds to cover $250,000. Some positions, like shorting AAPL, you would be paying as much as 20% per year for shorting the stock, but for the sake of this conversation (since I do now know at what percentage rate the brokerage firm will be charging for shorting DBMM), let us say you are paying 5% per year, meaning $12,500. This means that on a daily basis you are paying $34 per day.
If you short 100,000 shares, it means that you have a $500 position and if it goes down to $.004 cents (a 20% drop in price), you are making a profit of $100 but are paying $34 (per day) to do that. In looking at the past 7 months of trading in the stock, the stock has had a high daily close of $.0068 and a low daily close at $.0019, with most of the time, staying above $.0039. This means that if you had shorted the stock 7 months ago at the high and covered the shorts on the low, your total profit would be (at most) $600 (per 100,000 shares) and to do that, you would have paid $748 in interest rates and the absolute most you could have made shorting the stock is $500.
Does that make sense to you?
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