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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: Jazzbo who wrote (16297)	2/3/1999 2:09:00 PM
From: MskiHntr	Read Replies (2) \| Respond to of 44908

Tim, "no" shares are available for shorting is a little misleading. There are shares to be borrowed ONLY if a broker can find a source. There cannot be any shorting in the U.S. because: a. The shares of TSIG have not been approved for margin purposes. b. Since the shares are not marginable, they cannot be hypothecated (borrowed) from a customer's account. However, the Canadian brokers do not have any prohibition against shorting low priced stocks, BBs or any others. But, the Canadian broker has to be able to BORROW the shares to settle the trade on settlement date. Further, the Canadian broker imposes a rather restrictive monetary requirement on the "Shorter" a. The shorter must put up, as collateral, the 100% of the price of the stock. b. Depending upon the broker, there may be an additional monetary requirement of 100 to 200% of the price of the stock over and above the initial requirement. The broker must protect his firm against any adverse price movement. c. The shorter can be BOUGHT IN at any time if the broker is unable to continue to borrow the stock from the source. Even if an individual has an account with a Canadian broker, and if the account is long 100,000 shares or more, and the individual wants to "Short against the box" the broker will have to go out and seek a source for 100,000 shares. The shares long in the account cannot be used for the purposes intended. In light of the onerous monetary requirements, the il-liquidity of the shares, the potential for buy in at any time, shorting a BB is hard on the pocketbook. Best, Joe