Replies to post #2481 on NSS ~ Counterfeiting Stock ~ MM Games Played

[janice shell]

What is the profit potential naked short selling?

100%. What so many people conveniently forget is that if you short naked, you STILL have to pay margin and maintenance, which in cheap pennies is very expensive. And you need liquidity, which is rarely available. Think dollar volume rather than X million shares. The most important thing shorts look for is consistent high volume, so when they cover they can do so without driving up the price too much.

Oh yeah, and of course everyone knows that any penny stock can run big at any time, for no reason. If you're short, you're absolutely screwed.

[janice shell]

So let's say someone borrows shares and shorts sells them. Assume their margin interest is $10...

If it's a penny stock, assume their margin and maintenance is $2.50 PER SHARE. Now, if they're professionals, they'll pay less--whatever kind of deal they made with their clearing firm--but it's still VERY expensive.