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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (3477)	7/7/2001 11:25:02 PM
From: Don Pueblo	Read Replies (3) \| Respond to of 6873

To short BB stocks, you have to find a broker that will loan you the shares. All you need to do is ask. If the firm has inventory and is willing to loan you the shares, you can short the stock. There is no "law" on the "minimum price" a stock can be to be able to short it. If you can't margin a stock you can't short it, since the short occurs in a margin account. A short occurs in a margin account not because you are margined or shorting more than the cash you have available necessarily, but because your potential loss on a short sale is greater than the total amount of cash in the account, no matter how much cash you have in the account. Minimum stock price for margin requirements (which are what you are talking about on the $5.00 thing) are set by individual clearing firms and by individual brokerage firms. If the broker you choose clears through an outside clearing firm, the two may have different rules for the cutoff on margin requirements. As a general rule, you should look for a cutoff around $3.00. If you have an account at a broker that says his limit is 5 and he clears through a clearing firm that has a limit of 3, you would have to ask the broker to let you short a stock between 3 and 5 and he can say no if he wants to, because he is executing the trade, not the clearing firm. (Incidently, there used to be a law about no shorting of IPOs for the first 60 days, but that changed about a year ago and you can short IPOs the moment they go public if you can find a firm that will loan you the shares. MANY brokers do not know the law has changed.)