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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: VLAD who wrote (17706)1/12/1999 5:53:00 PM
From: mrvn t. martian  Read Replies (1) of 23519
 
im new to the board but would just like to clarify something. since the stock is under 5, you cant own it on margin, even if its in a margin account. be that as it may, the reason shorts can short this stock is simple. once they make a market in the stock, they can do whatever they want, long or short. they can short the stock as long as they can borrow it. its the clearing firms that are the culprits here. they lend stock to every tom dick and harry that wants to short it because they make money on the margin interest from loaning the stock. its that simple. however, if everyone hypothetically was to have their stock delivered, there would be a MAJOR problem for the shorts, and you would have one hell of a squeeze. btw, i know this because i am a trader ( i am long vvus ) and find it relatively easy to short 2 and 3 dollar stocks at will. hope this helps in the discussion.
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