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Microcap & Penny Stocks : International Automated Systems -- Ignore unavailable to you. Want to Upgrade?

To: paulmcg0 who wrote (1177)	1/1/1998 3:58:00 AM
From: Frederic M. Civish III	Read Replies (1) \| Respond to of 7618

The price did not rise today, so, you are probably right about them not needing to cover, OR, they aren't shorting it. However, I believe at least some of them are shorting. Actually, as far as I know, there is no regulation anywhere that says you can't short a stock if it is below a certain level. It is just that most Brokers won't touch a short on a stock below $5, with a ten foot pole. If it is below $5 it is generally an especially risky stock, it generally has fewer shares out and it generally is more subject to large fluctuations, so they just don't do it. But, as far as I know, a Market Maker can short any stock they handle. All they need to do is sell stock they don't have, now, and buy stock later to cover it. Of course, if it doesn't drop, then they must buy the stock at whatever higher price it reaches. That could be quite dangerous, for you and me, but, since they are the market makers they can often manipulate the low priced stock so that this doesn't happen to them. I suppose it is still risky, but less risky than it is for the rest of us.