CBA Florida Inc. (fka CBAI)

[MinnieM]

Here's a bit more information for you. The "fails to deliver" are what matter.

overachiver explained it well in this post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=54296242

If one had much experience in the business or in trading large blocks of stock, he would know the following things about the mechanisms of trading which would explain why the daily short sales reports do not result in a large short interest on the bi-weekly reports.

Only the seller prints to the tape. The buyer does not print.

When trading any amount of stock which is larger than the minimum size (5000 shares on this stock) the trade is executed on a not held (or best efforts) basis. This means that a market maker first fills the order and then comes back to the seller's broker for the stock to be sent his way to cover the sale.

So, let's say Lumb has 25 million shares he wants to sell over the course of the day. Most liquidators of large blocks of paper would phone in the order to their broker. The broker would then give the order to his trading desk which would route the order to a market maker. The market maker would then try to sell it. As it is sold it would technically be registered as short sale because the buyer's paper had not yet been delivered officially to the market maker.

Once the trade is executed, the market maker reports back to the seller's trading desk that the order is complete. The trading desk then asks the seller's broker to submit billing for the stock which identifies the retail or institutional sellers account details. Once this is done, those details are used to clear the stock over to the selling MM who then transfers it "at the window" to the buyer's clearing firm. The "short sale" is officially covered when the seller's paper is transferred.

In reality, the "short selling" MM is covered in anywhere from a few milliseconds to a few hours. That is why you see large daily short sales tallies on almost all over the counter stocks from Microsoft to FFGO but these tallies rarely result in fails to deliver.

The reason there is so much confusion over the matter is that penny stock players as a rule do not know jack squat about the stock market and the way it all functions and this is why they are always getting scammed out of their money. They are dealing from a position of ignorance. These days most of them do not use a professional broker and do their trading online so the problem has become even worse. Most remain totally clueless until their money has disappeared.

I have always believed it is a damn good idea to learn the rules before you play the game, but others jump right in and play before they understand very much about it.