How To Reserve Shares To Short On Hard To Borrow Stocks

How To Reserve Shares To Short On Hard To Borrow

Stocks

When you wanna short sell these crazy Supernovas like KYUS, PDO and FPP, you gotta grab your shares early in the morning--think 7-8am--cuz everyone wants a piece of the action. Finding shares is the biggest obstacle when it comes to PennyStocking from the short side--especially on spamming pure plays like BSHF and KYUS, but the good news is that the shares are in such demand cuz the odds the stock dropping are so high!

When I was running my hedge fund, I had a beautiful little thing called "pre-borrows", at my disposal where I could and did reserve and reuse shares to short from Goldman Sachs (NYSE:GS) and I'd have them for multiple days, or until I canceled this preborrow. For that right, I paid some pretty hefty fee, something like .02 cents/share per day...just kidding, it's not hefty at all...I woulda paid 25 cents/share if they asked cuz I could and still can sometimes be 90%+ sure of a stock drop.

But now that I've given up all the special features that come with running several million dollars--to show you EXACTLY what it's like to trade with just a few thousand dollars--basic online discount brokers like Thinkorswim--the one I personally use and recommend for shorting these penny stocks--don't offer such luxuries so each morning you just gotta call them up or go to their site and click the "live chat" window and ask to borrow shares of whatever stock you might want to short that day.

Before I discovered this little trick, I would place my limit price waaaay above a stock's current price--as high as my pathetic buying power would allow--so I could go in there and manually change the limit later, but since these stocks are so volatile, sometime my order/s got executed, screwing me bigtime as I literally lost thousands of dollars accidentally shorting MXC and VRML...Ruined my week each time, especially VRML--click THIS link to see that wreckage--very stupid mistakes but good lessons for you guys.

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