2
$\begingroup$

Ive seen my junk inbox overflowing recently with a few stocks being pushed extremely heavily via unsolicited emails from a variety of 'firms', my guess is that these are done by the same individual / group of individuals.

The last stock i saw rose c. 70% during the period of the emails before plummeting.

Are there any regulations baring shorting these 'shadily marketed stocks' ?

$\endgroup$
  • $\begingroup$ I believe that's what Timothy Sykes from the TV documentary Wall Street Warriors did en.wikipedia.org/wiki/Timothy_Sykes not sure if it's legal or not $\endgroup$ – Matthew Lock Jul 7 '14 at 2:24
  • $\begingroup$ More info from his blog timothysykes.com/2010/05/… $\endgroup$ – Matthew Lock Jul 7 '14 at 2:29
  • $\begingroup$ I think in general you may trade any stock, unless it is by inside information or to market manipulation $\endgroup$ – emcor Jul 7 '14 at 20:35
2
$\begingroup$

Are there any regulations baring shorting these 'shadily marketed stocks' ?

In the markets I'm most familiar with, Canadian, the answer is no.

To be honest the biggest hurdle you'll come across is how do you short penny stocks that are being pumped and dumped?

1) There will often be no options on these so you can't use that avenue

2) Where will you get borrow on the stock, if its a penny stock, getting the borrow to short can be tough.

3) If you can get borrow, its likely to be expensive, Can you afford to hang onto the borrow long enough to cover your short?

If after all that you can short the stock then you need to consider, do you have the stomach to short and watch the stock rise due to the "pump"/hype the stock is getting?

Will you close the short after your first margin call? What about your second one?

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.