PAPER MAN...
What your question essentially asks is "Is there a limit to the amount of naked short sales an MM can make?"
The answer is clearly YES. Regardless of what the conspiracy theorists believe, by holding a short position in an MM's account the MM's are tying up capital. Based on some of the absurd presumptions by various posters I have read over the last few months, some of them believe that MM's have millions of dollars tied up in short positions. What many people don't seem to understand is that there are limits and restrictions on EVERY firm's capital to just how much cash they can tie up. While each firm is different, I personally find it hard to believe that some of the smaller firms in these stocks would risk several million dollars shorting a $.50 stock with only a $.50 MAX profit potential on the downside but unlimited loss on the upside if demand were to suddenly surge. Thus, to answer your question, MM's have limits and cannot continually print vapor shares as suggested. Just what the extent of these limits are I cannot accurately tell you (you simply don't know but it is all based on a capital outlay).
I have heard all of the theories and explanations (excuses for why the price has not risen) and it all boils down to pure speculation, nothing more. Nobody really knows what is going on in these BB stocks, and when the SEC eventually passes the short sale disclosure of MM's positions, the touts and promoters will no longer be able to play the game of 'smoke and mirrors' and hide behind an MM scapegoat. That being said, many of these company's on the OTC BB will be seen for what they really are. Who can we blame then?
As I have always said, trading and investing is about RESPONSIBILITY first. We must first blame OURSELVES, for having poor judgement and buying what may not be suitable for our investment needs, for letting the stock go too far against us, for not booking a profit, for buying a stock that is too thin with too much slippage, for not seeing the price action for what it really is, for knowing WE are right and the market is wrong... All excuses that only make the problem worse. Our first order of business is the PRESERVATION of our own capital, and proper money management strategies of that capital. Unless you have money that can be completely lost, do you think you should hang all of your hopes on a stock in a market area that is meant for HIGHLY SPECULATIVE issues? That is just my opinion.
Paper Man, none of this is directed at you. It is simply me venting my frustration at the vast amounts of excuses you see all over the internet message boards. In my humble opinion, it really is an epidemic in our society. Nobody seems to be accountable for their own actions anymore. Haven't we seen enough of this already?
Thanks for reading my ramblings all.
Wishing you all profits,
-- Gene |
