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Strategies & Market Trends : Floorless Preferred Stock/Debenture
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To: Mama Bear who wrote (438)6/6/1999 8:10:00 PM
From: BelowTheCrowd  Read Replies (2) of 1438
 
Barb,

That's true, in theory.

But seriously, how many $1 1/2 stocks are there in which you could borrow 100,000 shares?

With low priced stocks, the profit often isn't there because the float is just too small to make large enough positions possible. This is true on the upside as well as the downside.

And of course, your observation on the volatility of low priced stocks is true whether long or short. A $2 shock with limited float is much more likely to get cut in half than a $100 stock with an orderly market.

mg
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