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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John Fairbanks who wrote (2427)	7/28/1999 3:30:00 PM
From: Q.	Respond to of 2506

John, I agree that there are good opportunities in shorting BB stocks. On the BB it is much easier to find overvalued stocks with an underlying low-quality company run by low-quality principals. This market inefficiency is really very impressive. Perhaps it is due in part to the lack of ease in shorting BB stocks. Most discount brokers, or their clearing firms, have house rules against shorting them and also have rules against shorting stocks under $5 (or in one case I know of $6). However, several discount brokers allow allow you to short BB stocks and stocks under $5. Here are three: DLJ Direct, Yamner and Vanguard. As with stocks listed elsewhere, you can be short only if they can borrow the shares, which can be a problem with stocks having small floats. You can call their margin departments to ask how they do collateral. You'll need to open a margin account. Good luck.