I have asked this question it seems like a million times.
I've called optionhouse, Ameritrade and Smith Barney numerous times and each time I got a different answer.
I've been told the only way they can't be borrowed is in a non-margin account.
I've been told that if you put a sell order the shares can't be shorted.
I've been told that if you put a sell order the shares already shorted remain but any shares not borrowed are then unavailable.
I've also been told that the sell order must be "reasonable" to consider your shares as unavailable. (what's considered reasonable?)
I think the only way to know for sure is to place them in a non-margin account.
I don't like the idea of putting a sell order unless I am above the level I think the price will go. In this case in a perfect storm (with extremely good news on it's 3 products, which includes stop for efficacy, tumor necrosis in numerous patients, and either starting or partnering with another company for prostrate and a short squeeze) I feel the stock could go to 100-200 per share. If I had to put in a sell order I would make it $500 knowing the chance would be really slim. I wouldn't put it at $80, the chance of it going through is much greater. (I've never encountered a limit for how much I wanted to sell the stock for- could that be something new?)
If you pick the right company I actually like the short interest to be high. Look at OPK between here and Israel the short interest is over 62 million shares. Of the approx. 415 million shares the insiders own around 50% of the shares. The CEO, Dr. Frost purchases about 500,000 shares per month on the open market. I just love his quote regarding the shorts “Every company we’ve built has always had skeptics,” he said. “And they have always paid the price in the end.”
He is a billionaire and is able to play games with the shorts(he's done it with two other companies). Now Linda doesn't have the resources or past history that Dr. frost has but it is fun to watch the way he plays with the shorts. Back in November the stock went from $9 to $12.95 on a squeeze of about 3 million shares - so covering of 62 million shares, the share price would be $----! :)
In this case the short interest is both good and bad. They are keeping the share price down which affects financing but when good news comes out they will propel the price much higher than normal. As long as they don't drop the price too low (imo less than $4) I don't mind and it gives me the opportunity to buy more at discount prices.
Good luck to all longs in the next few weeks. My guess is that we have one PR next Thursday or Friday.
My prayers go out to Hodge's wife, staccani, swamprabbit and any others that are ill.
May everyone have a happy and safe holiday weekend!
To any veterans out there-- Thanks for your service!
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