Replies to post #207280 on CMKM Diamonds Inc. (fka CMKX)

[janice shell]

HUH?? When you sell short, even if you're shorting naked, you SELL STOCK. That's how you MAKE MONEY shortselling.

[janice shell]

It's unfortunate how few retail investors understand how shortselling works. They don't even have a grip on the basics.

This has made it possible for the Get Shorty bunch to persuade them of all sorts of crazy stuff.

Go ahead. Sell something short. Find out how it works.

[janice shell]

Here ya go:

Exception if property becomes worthless. A different rule applies if the
property sold short becomes substantially worthless. In that case, you must
recognize gain as if the short sale were closed when the property became
substantially worthless.

http://www.irs.gov/publications/p550/ch04.html#d0e10274