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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: Jim Bishop who wrote (51199)	6/14/2000 1:25:00 AM
From: asker2	Read Replies (2) \| Respond to of 150070

To prevent your shares being used as a short position DO NOT sign the Hypothecation Agreement... Who is shorting your stock and what to do about it? By Giando Argentina 06/13/2000 09:22 AM CST Who is shorting your stocks? A popular misconception about OTCBB stocks is that they cannot be shorted like their NASDAQ counterparts. This is partly true, but Bulletin Board securities can and are shorted. Canadians and traders with accounts in other countries can short any OTCBB stocks. OTCBB stocks can be shorted as long as the Market Maker the brokerage utilizes for order flow has shares available in inventory for shorting. A popular misconception about preventing shorting is to set high "good till canceled" orders. Unfortunately, this is not the case. A representative of Trac Data Securities stated that the only way to prevent your shares being used as a short position is to not sign the Hypothecation Agreement that allows your shares to be used in such a way. Tradecast Securities stated that the Transfer Agent holds the securities under your social security number and therefore shares cannot be used by others to open a short position. It seems that different brokerages have their own set of guidelines regarding the use of shares. The traders that short stocks are obviously a source of great aggravation for holders of long positions as the shorting tends to stall an upswing in price or causes the price to trend downward considerably. The only way that shorting in a particular security will cease is for the price to start an upward trend due to buying pressure, which will cause the shorters to buy to cover their position. There are many examples of a phenomenon called a "short squeeze", in which the company releases a press release of substance that draws new investors in and also causes huge short covering. In February, a company was rumored by a fellow trader to have a substantial short position. Several traders bought the stock and held it in face of severe shorting. When the company released news of a stock split, this created the buying pressure needed to force the shorts to cover. The stock ran from $.65 to $20 in a matter of a few days. That was the perfect short squeeze. This was achieved in 3 ways. First, excellent research was done by one trader in particular as to the situation. Secondly, the company helped with a positive press release. Third, the investors held their stock patiently while the shorting was taking place. The only way that investors can combat shorting is to know the potential of the companies they invest in, do thorough research, and hold their positions. Giando Argentina is an experienced trader focusing on the OTCBB market.