Post by
Mrtkr1 on Feb 12, 2018 4:45am
Shorting in the OTC
There’s been lots of talk about shorting in the OTC so I thought I would give a brief overview.
Shorters in the OTC are required to have $2.50 per share of stock they are going to short. For example, if a shorter wants to short 10,000 shares of Bioa, he/she must have at least $25,000 in their account. Interestingly, the most profit they can make on those 10,000 shares is $880. That’s the max and would occur ONLY if the share price went to zero.
This is why even very large shorters with deep pockets will NOT short stocks under $0.25. In short (no pun intended), we will see almost no new shorters come in as risk is high and payoff is very very low. Existing shorts already have positions but they also have tons to lose and not much to gain. They will try to cover this week. Believe it. Anything else makes zero sense. Since Bioa has been hit with heavy shorters for many months, moving to the OTC has actually been a very positive move from a shorting standpoint. Not sure if managment purposely allowed this to take place but this move is going to make shorting BIOA nearly impossible.