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To: TFF who wrote (6527)	2/17/1999 8:54:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 12617

Some additional material relating to short selling: I wanted to clarify my understanding of short sales rules. There is no per se rule which says that stocks under five dollars, penny stocks or bulletin board stocks can not be shorted. They can be shorted if the stock can be borrowed. If your clearing firm has it, and can be borrowed, you can short it. Obviously such stocks typically are more difficult to borrow and may not be marginable, but it can be done. Note that if the stock is under five dollars, the position may not have any loan value, that is, it may be nonmarginable. As a result you may need to come up with 100% equity for the short position, or upto $5 per share depending on the clearing firms' margin requirements. Shorting IPOs. IPOs may be shorted as soon as the clearing firm has a position which is hypothecated by the client. In my experience, while a firm could theoretically have such a position on the first day the stock comes to market, I have rarely ever seen this. Typically, the position becomes available on settlement day, when positions of the clearing firms' clients settle. At that moment, the clearing firm, holding the clients' stock in street name, now has settled securities. Thus, if a stock comes to market on Tuesday, the clearing firm may have settled positions in the stock on Friday. Friday would probably be the first day the stock can be borrowed and thus shorted. The exception would be larger firms which have inventory from clients who received the stock as a result of the IPO. That is they received the shares ahead of it coming to market as part of the IPO. Syndicate members though must 30 days to short the position. Regards, Steve@yamner.com