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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services
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To: Leroyt who wrote (14197)4/28/1998 9:42:00 PM
From: Anthony Marks  Read Replies (1) of 27968
 
Leroy, Trader, buster.. Enjoyed the discussion on shorting BB's. would like to add a couple of things.

I don't think shares of FAMH can be borrowed for shorting since the stock is not marginable. This applies to stocks under 5.00. (don't know about the 3.00 thing buster) Normally they are held in a cash account and cannot be loaned by an MM since they are owned outright buy the purchaser. It is my understanding that only shares bought on margin can be loaned.

Affirmative Determination means the MM must determine if sufficient shares are available to ensure delivery prior to executing a short sale. I would guess, you would have to find a MM that makes a market in FAMH and has enough shares warehoused from bona fide market making activity. ( Doubtful)
MM's who make a market in the stock are exempt from borrowing to short. To provide a liquid market they are allowed to short naked. Check this link. nasdr.com

Margin account- I believe the requirement to have a margin account is to insure the short seller qualifies for credit and can cover the "unlimited upside risk" I assume they would give you margin call if the stock doubled in price from the price you sold short at.

In a nut shell I agree with trader, I don't think the average investor can short FAMH.

AWM
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