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Shorting a microcap/penny that's involved in a pump and dump is exceedingly risky. Not only have they proven they can manipulate the stock to great heights, but
by trotsky 16y ago
Shorting a microcap/penny that's involved in a pump and dump is exceedingly risky. Not only have they proven they can manipulate the stock to great heights, but shorts also represent a guaranteed sale even at prices no one else will touch if they can force you to cover.
If you know you're riding the "dump" phase down then you're all good, but the last thing you want to do is be at cross purposes with the manipulators.
- chipsy 16y agoNot to mention the fact that it's hard to get short shares of a penny stock as a commercial investor, and once you have them, you face the same low-liquidity problem that everyone has in that market. Pennies are a market that are slow(few trades) and fast(massive price swings) at the same time. The people that play them seriously wage a war of information, and sit around waiting for every tick all day, posting on forums, trying to discern the actors and their intentions. And it's frighteningly easy to deceive oneself into following pumper's tips, like those 50 gave. It just has to be heard from someone you trust, at a vulnerable moment.