InvestorsHub Logo
icon url

serfdom

09/10/06 4:47 PM

#71518 RE: bleah #71516

Anyone can fly to the Bahamas and short a penny stock.

One other comment - the "averaging up" principle also works with legitimate shorting, where you borrow real shares to sell.

The outcome is not a total collapse of the stock, but is sufficiently profitable much of the time.

The most important part of shorting is that it offers a built-in hedge. When you cover - you actually BUY the shares you borrowed. Now you have a long position. If you are a crafty shorter, you'll cover before anyone else when that amazing 10K comes out.

Now you have a long position in a stock that's in a short squeeze. More profits!