Most Local Brokerages do not let retail short penn
Post# of 690
Posted On: 10/10/2012 4:22:19 AM
Most Local Brokerages do not let retail short penny stocks. That's any thing under 3.00 a share.
Scottrade and Etrade do not i confirmed that. Not sure about Ameriteade. Just call them and say can I short penny stocks...
Private brokerage firms like VFIN and the other odd tickers most of them do.
Also each brokerage firm is allocated so many shares as well. So if Scottrade runs out of EEDG they may have to short to cover your order on a internal basis. That means if someone goes and sell there shares they own in scottrade they could be selling shorted shares. Then what happens is scottrade searchers the system to cover the shares sold... If they find more available shares they can short nothing happens. But.... If there is no more shares available to hide the short position they have 3 days to cover them via buying on the open market. If someone retail is shorting in a brokerage company that allows shorting then the brokerage company wi automatically look to find a replacement for the shares there shorting if someone else happens to sell there shares that were being used to short. If they cannot find replacement shares them that brokerage company will either email or call the person directly and tell them they have x amount to cover or they will be forced to cover.
Hope this helps. I have spent alot of time researching this.
So there are always to potential shorts. The MM's because they run out of inventory and by law have to fill your order or retail shorting.
Yes big news always has the ability to cause a short squeeze especially on a depressed stock like ours because on huge vol shorts scramble to cover and whole folks are taking profits there causing there own internal short squeeze as well.
Smitter SMTT
Scottrade and Etrade do not i confirmed that. Not sure about Ameriteade. Just call them and say can I short penny stocks...
Private brokerage firms like VFIN and the other odd tickers most of them do.
Also each brokerage firm is allocated so many shares as well. So if Scottrade runs out of EEDG they may have to short to cover your order on a internal basis. That means if someone goes and sell there shares they own in scottrade they could be selling shorted shares. Then what happens is scottrade searchers the system to cover the shares sold... If they find more available shares they can short nothing happens. But.... If there is no more shares available to hide the short position they have 3 days to cover them via buying on the open market. If someone retail is shorting in a brokerage company that allows shorting then the brokerage company wi automatically look to find a replacement for the shares there shorting if someone else happens to sell there shares that were being used to short. If they cannot find replacement shares them that brokerage company will either email or call the person directly and tell them they have x amount to cover or they will be forced to cover.
Hope this helps. I have spent alot of time researching this.
So there are always to potential shorts. The MM's because they run out of inventory and by law have to fill your order or retail shorting.
Yes big news always has the ability to cause a short squeeze especially on a depressed stock like ours because on huge vol shorts scramble to cover and whole folks are taking profits there causing there own internal short squeeze as well.
Smitter SMTT
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