CBD Denver Inc (CBDD)

[calicojones]

Someone said the MMs were running out of shares because so many shares were held by longs. It is my understanding from my Scottrade broker that while I have 25,000,000 shares in my Scottrade account, Scottrade has the right to sell those shares to MMs who want to short the stock. This is the exchange they get for allowing me to use margin to buy more stock than I have money in my account. In turn, Scottrade get the fee paid by the shorting MM for the use of this stock.

So even though I don't plan to sell, and my account still shows I own the shares, my shares could hit the market briefly if a MM shorted the stock and bought it from Scottrade. Of course, if the stock runs up too much and everyone with Scottrade accounts wants to sell their shares, the market makers would be hit by a call on their shorts and we'd be in what some call a "short squeeze" and they'd be forced to cover the call with high priced stock within a short term (a day or less).

This is my understanding of the situation. If I'm incorrect, someone please help set me straight.