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Microcap & Penny Stocks : ACCY - Accsys Global Network, Inc (NASDAQ OTCBB)
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To: stockid who wrote (742)2/2/1998 3:27:00 AM
From: Joe Sing  Read Replies (3) of 1574
 
I have no desire to "get into" this, but MR BigAir is quite correct. Anyone can short a position, but many brokerages discourage or disallow it... UNLESS the client account has sufficient position (1.5 to 2 times) in either cash, money market, or mid-cap or better to cover in the event that the issue decides to go north instead.

Chances are, you deal with a discount brokerage which is even more stringent regarding undeclared short positions than a full-service house. While you are fundamentally wrong, you are pointed in the right direction in-as-much as penny issues are considerably harder (and more dangerous) to short than blue-chip.

Shorting is not for the faint of heart, and is a far better way to lose money than going long. Having said that, it can be a very good strategy when backed by private placements, seed positions, etc. The argument being, that if one wants to play this way, one should play the derivatives instead. It's more socially acceptable. <g>

joe

PS - Market Makers rarely short an issue, unless it can be done with volume and momentum... i.e. A one day move. MM's do NOT like to carry major positions "overnight". This is not my opinion, but the comments by one of my brokers whom works for Public Securities... a US Market Maker.
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