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Posted On: 06/27/2020 10:04:09 AM
Post# of 72440
I have spoken to someone who used to be in charge of small cap trading for a major international bank. He said that "of course" margin requirements do not apply to the bank itself, nor to the hedge funds and other large clients of the firm. It's only small traders with their individual accounts at retail brokerages who have any significant margin requirements to short small-cap stocks.
The narrative that it's "too expensive to short these stocks" is utterly false.
He said they did it all the time.
As far as the CUSIP number change -- there was huge volume when CTIX became IPIX, when you look at the volume on the day the announcement was made and the days following. Remember that at that time, average daily volume was less than 200k.
DO NOT CONFLATE LEGAL short-selling with NAKED SHORTING.
LEGAL shorts are simply transferred to the new CUSIP number. No covering is required.Volume is not affected in any way for LEGAL shorts.
NAKED SHORTING has to be covered. We saw that from the big numbers upon the change of CUSIP.
The narrative that it's "too expensive to short these stocks" is utterly false.
He said they did it all the time.
As far as the CUSIP number change -- there was huge volume when CTIX became IPIX, when you look at the volume on the day the announcement was made and the days following. Remember that at that time, average daily volume was less than 200k.
DO NOT CONFLATE LEGAL short-selling with NAKED SHORTING.
LEGAL shorts are simply transferred to the new CUSIP number. No covering is required.Volume is not affected in any way for LEGAL shorts.
NAKED SHORTING has to be covered. We saw that from the big numbers upon the change of CUSIP.
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