I KNOW that MM's can short stock. I had an account at a trading firm that was also a MM. I couldn't physically execute the trades, but I called them in for the trader to do it for me. Anyways, I asked him a lot of questions(he answered because he wanted my business AND he was charging me 3%), including shorting stock. YES they do short stocks and a lot of times it's to create liquidity....and they have 3 days to cover. These guys(the MM's) are friends with each other and everyone helps each other...there are a couple of exceptions. That's the legal version.....then there is the "off shore" traders that naked short...whole different ballgame and story.
So I have to say that Qtrax is being shorted, can be shorted, and will be shorted. If they are, let's hope those "beotches" get short squeezed.