Black Dragon Resource Companies Inc (BDGR)

[marsnvest]

I will not claim to be an expert on short selling, but here's what I know through experience and contacts. In general, individual brokerage houses make the rules on short sales following SEC regulation. I've known individuals at the same brokerage house with different rules on how and what they can short. I'm told that a lot depends on how deep the pockets are of the particular investor. This then would open up the trading desks, market makers,etc. to be the ruling force on short sales. I cannot believe that anyone would short a cheap stock, because to me, risk/reward is stacked against you based on simple math( 0 to ~), but I am told the cheap stocks are popular shorts. To take this further, with some reference to BDGR, a very active shorting area is the "pinkies". Part of this is due to lack of regulation protecting the stock and the investor. Many BB ot PK stocks are targets of "naked" shorts due to the same lack of regulation. The reasoning for shorting these kind of stocks is the fact that many of these stocks are destined to go to zero.(I'll probably here about that comment). There are also the cases where a huge short position is acquired(usually naked) and something triggers a reversal and a seemingly worthless stock can be worth a lot( at least for a short time). There's more, but I do not want to be too wordy, I hope this helps.