John,
<<I sold my warrants at 17, when the stock was 22, so I'm now short the equity without any hedging. I just hope I don't get my shares called in. With this small float and this much flipping going on, there's no way to know if the shares I borrowed will be available tomorrow.>>
I would think that with high turnover (lots of churning), that the shares for borrowing would actually be more available than if the stock didn't trade. As investors (they're actually speculators) jump in to buy, the brokerages then have inventory. Even though the inventory is rapidly churned, the brokerages still have three trading days to make good on their delivery. In essence, 50K of volume in brokerage-A for a few minutes is good for 50K shares to be loaned out (at least for three days). As the churning continues, the 3 days would be extended indefinitely so long as there are buy orders processed by brokerage-A. Beware of the music ending. When the buy orders stop, the borrows are due 3 days thereafter.
This is all a theory, and I don't know if brokerage-A would allow shorting on a stock with the volatility and trading frenzy like BFLY.
Schwab did something interesting this morning. They dis-allowed electronic trading for uBID and ticketmaster, citing the volatility. If you want to trade, you must talk to a broker.
JMO. I have no position on this or any other internet stock, long or short.
chester |
