Trader J's Inner Circle Message Board

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Strategies & Market Trends : Trader J's Inner Circle

NVDA 180.94

-1.5%

Dec 11 3:59 PM EST

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To: melinda abplanalp who wrote (7005)	1/30/1999 7:05:00 PM
From: Triffin	Read Replies (2) of 56535

THREAD......SHORTING Having just read the last 75 posts I'd like to try and clear up a few misconceptions about 'short' selling in general and PRFM in particular... 1) PRFM has 6.52 mm shs outstanding and about 1.90 mm shs in the float. The stocks price move from $1.00 end of November to $13 1/2 intraday on Friday has already attracted anyone that has wanted to short this one. I strongly doubt a 'legal' short can be entered at this time and I will confirm one way or the other before the opening on Monday with my clearing firm..if they can't borrow it no-one can. 2) You can only 'short' shares that are held 'long' in a margin account in 'street' name. Fully paid for shares in a cash account cannot be loaned out by your clearing firm to people who want to short; read your 'hypothecation agreement' that you signed with your broker when you opened your account. 3) "Professional" short sellers rarely short stocks in uptrends; they short 'broken' stocks and stocks with declining chart patterns. 4) "Professional" short sellers rarely short stocks 'naked' (no nude trading for them <gg>). Most use 'synthetics' (ie) short stock + long call which usually doesn't require an uptick to establish the position or a 'bullet' long stock + long ITM puts.. exercise the put..now you're short. These are 'banking' positions that earn interest on the mark to market dollar value of the short or as a 'leg' into a reverse conversion. (ie)short stock + short put + long call 5) If you want to 'bust' a 'short raid' on a thin stock like PRFM then all the longs need to instruct their brokers to move your long stock from your margin account to your cash account. This will generate a 'buy-in' on the short seller. Jim in CT..been there..done that..

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