Replies to post #265464 on Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

You can short penny stocks through Interactive Brokers and any other broker not based in US. In addition, you just need to understand the legal & tax implications for doing so as a US citizen.

This is my point. Maybe with a little help from the Russians anything can be accomplished, but shorting a penny stock is not something that can be done at e-trade or Schwab, etc. You would have to go through six degrees of separation to even buy the option through a foreign broker, with significant tax and repatriation costs. Apparently, Interactive Brokers not only charges $1000 penny stock fee but also charges DAILY Exposure Fees. Anybody claiming the failure of this stock is due to short options is delusional, and anybody suggesting the stock will fail further because of short options is just trying to instill FUD and trolling in a particularly uninformed way. I call bullshit on both.





https://www.interactivebrokers.com/en/index.php?f=14718

As part of this daily process, IB will calculate an Exposure Fee to be charged to high-risk accounts based on the potential exposure the account represents to IB in the event of a major loss. Under the Exposure Analysis conducted by IB, if an account would lose so much value that its equity would be eliminated and it would then additionally have an unsecured debt to IB (i.e., negative equity), this would represent an Exposure to the firm (since IB is legally obligated to guarantee its customers' performance to the clearinghouse even if the customer has no remaining equity).

The Exposure Fee will be calculated for all calendar days and charged to the account at the end of the following trading day. Example, the exposure fee charge on Monday’s activity statement will reflect the charges for Friday, Saturday and Sunday. The results of the Exposure Analysis relating to the Exposure Fee will be made available for each account via the Account Management section of IB's website.