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Technology Stocks : The Iomega-Joel Pissing Subject
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To: steve goff who wrote (8)2/22/1997 7:42:00 PM
From: Herb Fuller   of 11
 
Steve ,

When you open an account with a brokerage house you sign off control on the equities that they are holding in trust for you . If some one want's to sell one of your eqiuties short for instance they , the brokerage house , have the right to use your equities for this purpose .

Their are rules such as the up tick rule that that states that the equity cannot be shorted as the equity is falling in price .

This artificialy increases the amount of trading that can go on because the short seller is selling an equity that another invester holds and the new holder, if they have it in a trust account , provides the house with more shares available for shorting . It can get scarry and I have heard of real lockups in years past where the trading has been shut down on an issue to clear out the problem .

If the equity is moving up in price and the invester is increasing his holdings at the same time the short seller is covering his position you have what is called a short sqeeze .

I guess to answer your question , the number of shares that are available for shorting is limited to the number of shares available in the trust accounts that the brokerage house has in it's possesion .

Selling equities short has nothing to do with shares offered for sale if I read your question right .

Herb
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