Here is where the hole appears.
Broker Canatrash shorts 500,000 shares of XYZ. They also have 2,000,000 shares of XYZ long. Stock XYZ suddenly posts some relevant news. The stock goes from $1.00 to $1.75.. Canatrash sells into the "weakening strength" at $1.75 and continues to sell down to $1.00! When the stock reaches $1.00 they cover the 500,000 shares that were short and then start buying long. They now have made a bundle moving the stock down, they have covered their short position, and they are now accumulating long!!
So whats wrong then !! The VSE and ASE are a bunch of idle buearacratic "back turners" who have little, to no intention, of curbing the brokerages (their members, their Market makers)!! Or they genuinely don't understand the problem!! Or they genuinely CAN'T solve the problem without offending the brokerages!! You pick which one you prefer. So what do we do, start worrying about Joe Who shorting 1000 shares of his "best non-favorite" stock!! NO absolutely not! There is only one place that shorting can be fairly controlled and that is at the VSE/ASE it is not up to us to sort out their problems!! I personally hope the VSE drops to 200, maybe, just maybe, they will start developing a set of rules that all will play by!!!
MOO my opinion only!!!
the Chief |
