Replies to post #11379 on Radient Pharmaceuticals Corporation fka RXPC

[Gold Seeker]

Stockrule, it is not 100% short but 100% unsettled trades. Those are trades where the shares were not immediately available to cover the sale.

No one actually shorts a sub penny stock and certainly not one at .0001 so these trades most likely come from the lenders selling shares that have not yet been delivered to the broker from the transfer agent.

In this stock, that is just about the only source of unsettled trades.

[Peggy]

Not a stupid question at all if you are not familiar with the subject.

First, you need to understand what shorting is. See my earlier post today on that subject. Think of it as the opposite of what you do when buy a stock.

When you buy a stock you are betting that the price will go up so you can sell later at a profit. Also known as going long.

However, if you think the price of a stock will go down, why would you buy it? You wouldn't of course. So, you might elect to short it ... with the help of a broker. The broker finds shares that he can borrow on your behalf that you immediately sell and pocket the proceeds, less commissions and fees, which can be as high as $2.50 per share. If the price goes down as you predicted you buy these cheaper shares and use them to replace the shares you borrow. You pocket the difference between the price you sold the borrowed shares at and the price you bought the cheaper shares. It can be the only way to make money if a stock is headed down. But, if the stock reverses course and heads up before you bought the replacement shares (known as covering) you can get torched if your are forced to buy higher price shares to replace the ones you borrowed. And the broker can force you to cover with higher priced shares. This is referred to as a margin call. If can't pay for the margin call the broker will liquidate enough of your account to do so. This is one of the things you must agree to before you are even allowed to short. If a stock actually does go to the moon your losses could be huge.

Some will scream that the "shorts will burn." Yes, shorts can get burned but not in .0001 penny stocks since contrary to popular opinion there are no shorts to speak of in pennies, certainly not in .0001 ones. Do not believe anyone who would have you believe otherwise.

Dangerous and risky game.

Regardless, shorting in penny stocks is something that rarely if ever occurs despite cries of let the shorts burn and trash like that. Take RXPC for example. It is trading at .0001 which is as low as it can go. In the first place no broker is going to be able to find shares for you to borrow. And even if they could, why would you short a stock that cannot go down any more. Rubbish.

Back to your question ... no stock, including pennies, can be 100% short. Many toss around something called the OTC Short Report as proof. Wrong, the OTC Short report captures unsettled trades, not shorts or more properly short interest. Understanding that is an entirely different matter and is a subject for another day.

And, since it can't happen it has no impact on the pps of a stock.

But I can guarantee you that the terms shorting and penny stocks rarely if ever truly belong in the same sentence.

GLTY