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Microcap & Penny Stocks : Jax International (JAXI)

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To: Sharon A. Gray who wrote (573)	8/24/1997 12:22:00 PM
From: Alan Markoff	of 2430

GAIN KNOWLAGE THIS IS PART OF AN ARTICLE IF YOU WISH TO VIEW THE REST HERE IS THE ADDRESS> microcapstocks.com A Short Trap The term "short trap" refers to backing the shorts into a position whereby they must cover (buy back the short position in the open market). The only effective way is to demand delivery of all of the shares currently held in street name. This must be done by the shareholder. The problem is that most brokers are brainwashed to believe that if the shares are not on account at their brokerage firm they are gone forever and the commissions generated selling the shares will go to somebody else. One possible solution is a large buyer (sometimes as much as 10% of the float) who will demand delivery of his shares. The Good News (Is there any?) The good news is that is the trap is effectively enacted the short will HAVE to cover the position. This can, in some cases, take a $.50 stock to $15 or $20 a share - creating huge liquidity for the company and make the shareholders rich. (20-1 returns are not uncommon) Some of the most successful stocks on Wall Street are a result of an effect short trap. Example: Presstek (PRST) -- this was a $20 stock that made shareholders a five banger when a major promoter brought in some large players to bust the short. The Only Real Protection The only real protection: education of investors! Demand delivery of all shares you buy!!!!

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