Penny stocks - The anatomy of a pump and dump

[mmm...Jaz]

Originally Posted by NoJobRob

Your broker.

Maybe I am, but I didn't think it was any of your business...

[Guapo]

Knuckles,

I suppose it is doable but it is difficult. First of all, most brokers do not allow shorting of stocks under $5. As far as I know there are only 2, maybe 3 brokers that allow it and those have a list of stocks you can short. If the stock you are interested in is not on that list, you can't short it. The lists I have looked at have been quite limited. Any penny under $1 is likely to be absent from such lists.

I have seen a number of people claim it is easy to do but my opinion is that it isn't. There is an article in the Guapo thread covering shorting of penny stocks.

If shorting penny stocks were easy to do, we would see a lot of posts about it. We see very few posts on that topic however.

Guapo

Originally Posted by Knuckles

Another question.

Is it possible to exploit pump and dump scenarios by watching for the downturn from the peak and then selling short?

[Knuckles]

Thanks for the details!
I think for now, I'm just going to go with a broker I'm happy with and if they allow this method with certain stocks, great. If not, never mind.

I'll keep my practice with shorting to stocks $5 and above then.

I'll have another good look at your thread, Guapo. Thanks for all your help!

Thanks for your input too, NJB (and Jaz for the light relief )

Originally Posted by Guapo

Knuckles,

I suppose it is doable but it is difficult. First of all, most brokers do not allow shorting of stocks under $5. As far as I know there are only 2, maybe 3 brokers that allow it and those have a list of stocks you can short. If the stock you are interested in is not on that list, you can't short it. The lists I have looked at have been quite limited. Any penny under $1 is likely to be absent from such lists.

I have seen a number of people claim it is easy to do but my opinion is that it isn't. There is an article in the Guapo thread covering shorting of penny stocks.

If shorting penny stocks were easy to do, we would see a lot of posts about it. We see very few posts on that topic however.

Guapo

[Guapo]

Knuckles,

Ok. My pleasure.

Guapo

Originally Posted by Knuckles

Thanks for the details!
I think for now, I'm just going to go with a broker I'm happy with and if they allow this method with certain stocks, great. If not, never mind.

I'll keep my practice with shorting to stocks $5 and above then.

I'll have another good look at your thread, Guapo. Thanks for all your help!

Thanks for your input too, NJB (and Jaz for the light relief )

[mmm...Jaz]

Originally Posted by Knuckles

Thanks for your input too, NJB (and Jaz for the light relief )