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Strategies & Market Trends : Shorting stocks: Mechanical aspects
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To: Q. who wrote (17)6/17/1997 1:01:00 PM
From: Stox   of 172
 
Hi John. I have a few questions regarding the shorting of stocks in Canada. I have never shorted stocks before but understand how it works. I use Action Direct, a discount broker of Dominion Securities.

Their rules for shorting are as follows:
- Of the Cdn exchanges, only TSE and MSE - i.e. no VSE and ASE
- nothing under $3.00 Cdn allowed to be shorted
- initial margin requirements are 150% which must be maintained - i.e. the amount you wish to short plus 50%.
- the broker must first verify that they have stock available to borrow before authorizing the short sale.

If anyone knows of discount brokerages in Canada that allow short selling for ASE, VSE and/or stocks under 3.00 please comment on this thread.

I am only interested at the present time in finding out about shorting Cdn listed mining and exploration stocks which typically do not have any revenues or earnings.

How does an average investor short VSE, ASE, or sub 3.00 stocks?

Will full service brokers allow this? If yes, then which ones and what are typical commissions?

Are the above Action Direct requirements typical of other Cdn discount brokers?

I follow many of the higher volume VSE and ASE stocks and have been successful at paper trading short sales of stock promotions when the insiders are "blowing" their paper out.

Any comments appreciated.
el
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