That is too funny - DRNK investors don't understand how shorting works - it isn't economically feasible to short a trips stock - but there is always someone ranting about ole shorty.
I suggest everyone research and understand the difference between short interest and short volume - a margin account - the $2.50 rule - the borrow rate - margin maintenance fees and I will post a primer on shorting that proves it isn't economically feasible to short trips stock.
There has been speculation about short sales on DRNK - it seems many don't understand how shorting works or the problems with shorting a Trips stock.
First, I would recommend that everyone call their broker and ask them if they can borrow shares of DRNK to short.
The shorting is a myth on all pinkies. Most don't understand that there are margin requirements for shorting stocks below $2.50. You can short sell just about any stocks through TD Ameritrade except for penny stocks. In other words, if you're trading OTCBB stocks or the pink sheets, you won't be able to short.
The average investor can't or it is extremely difficult to short a penny stock - the margin requirements are just cost prohibitive. You have to have $2.50 margin per share to short a stock under $2.50. It just isn't economically feasible.
If you want to short 1,000,000 shares of a stock at $0.0006, you have to have $2,500,000 in your account, and 1,000,000 shares at $0.0006 is only $600 - so it will cost you $2.5 million to control $600 of DRNK stock.
So you borrow 1 million shares and they are sold for $600 - if DRNK drops to the lowest that would be $0.0001 and you buy 1 million shares for $100 to repay your broker the 1 million shares of DRNK.
So you would make $500 and that doesn't include the borrow rate, broker fees, margin maintenance fees - so the best you could do is make a few hundred dollars but have $2.5 million tied up as dead money until you close the open short position.
The good thing is you won't get a margin call unless it gets over $2.50.
And for those using junk like the OTCShortReport - they need to understand that FINRA Daily Reg SHO data, it is meaningless on it's own. The Trade cycle is Trade Date plus 2 days for settlement, Daily Reg SHO only shows the Initial leg of each transaction and doesn't reconcile based upon settlements made seconds later as the trade has yet another 2 days to settle.
MMs do not "short" penny stocks. As part of making a market, they may have periodic short positions throughout a trading day if they fill buy orders for more shares than they have in inventory, but they also often have inventory when they fill sell orders. Having an inventory does not mean that they are going "long" any more than having a temporary net short position is "shorting." This kind of temporary short position is legal and necessary for efficient trading.
The FINRA daily short data does not show true short positions and that the FINRA Bi-Weekly report is the only reliable place to find the short interest. It also explains that when new shares are entering the market, they are reported as short until the stock is delivered.
The short data for all OTC stocks including those quoted on OTC Markets (Pink Sheets) is sent to FINRA twice a month by broker/dealers. FINRA compiles it and publishes a semi monthly report. These bi-weekly reports show the aggregate short position by all market makers as of that settlement date.
Hopefully this will help provide clarity and understanding about shorting and why shorting a trips stock is something that doesn't happen - or happens only in pinky fantasyland.
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