It's not about retail naked shorting. That's virtually impossible. It's about institutional naked shorting. They do not have the same set of rules as a retail investors.
Market makers are granted special dispensation by the SEC to naked short penny stocks without the financial implications a retail investor faces so they can "make a market" without having a stockpile of penny stocks that are in some cases, illiquid because of low volume.
Market makers and others use this special dispensation to make money off the back of retail investors because they are able to hold a short position longer without the financial penalties or margin calls. When they do get to the time limit on holding a naked short position, they just make a side deal with another MM and others to buy the position and the clock starts all over again. They can do this forever. It is not a level playing field for retail investors.
The SEC turns a blind eye to the activity because the MM's in return maintain an "orderly market" in penny land where the potential for fraud is extremely high. It would be impossible for the SEC to do it on their own.
MM control the share price of every penny stock. The bashers you see are one of the tools used to manipulate investor sentiment, helping to move that share price to wherever they want it. Move it up to sell and load, move it down to short and sell, then reload and let the price go up again. Wash rinse repeat.
I'm no expert, but that is my understanding of it from the research I've done. I might be off on a few points but that's the gist of it
The bad part is that the legitimate small companies that actually have potential to do well are lumped in with the fraudulent ones and treated the exact same way. They are forced to stay in the OTC wash/rinse cycle and are attacked even harder to keep them in that cycle.
It small companies it is very hard to hold to a plan because sometimes you are resource constrained and have to choose where you spend your money to get the most bang for your buck. The bashers take full advantage of this by portraying planning constraints as management incompetence.
Your option to hold to your own beliefs, but it's your money they are screwing with.
Good luck to you.
Market makers are granted special dispensation by the SEC to naked short penny stocks without the financial implications a retail investor faces so they can "make a market" without having a stockpile of penny stocks that are in some cases, illiquid because of low volume.
Market makers and others use this special dispensation to make money off the back of retail investors because they are able to hold a short position longer without the financial penalties or margin calls. When they do get to the time limit on holding a naked short position, they just make a side deal with another MM and others to buy the position and the clock starts all over again. They can do this forever. It is not a level playing field for retail investors.
The SEC turns a blind eye to the activity because the MM's in return maintain an "orderly market" in penny land where the potential for fraud is extremely high. It would be impossible for the SEC to do it on their own.
MM control the share price of every penny stock. The bashers you see are one of the tools used to manipulate investor sentiment, helping to move that share price to wherever they want it. Move it up to sell and load, move it down to short and sell, then reload and let the price go up again. Wash rinse repeat.
I'm no expert, but that is my understanding of it from the research I've done. I might be off on a few points but that's the gist of it
The bad part is that the legitimate small companies that actually have potential to do well are lumped in with the fraudulent ones and treated the exact same way. They are forced to stay in the OTC wash/rinse cycle and are attacked even harder to keep them in that cycle.
It small companies it is very hard to hold to a plan because sometimes you are resource constrained and have to choose where you spend your money to get the most bang for your buck. The bashers take full advantage of this by portraying planning constraints as management incompetence.
Your option to hold to your own beliefs, but it's your money they are screwing with.
Good luck to you.
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