How to Short Penny Stocks

How to $HORT PENNY STOCKS STEP 1 IDENTIFY THE STOCK Identify a stock that you believe will decline in price, enabling it to be bought back at a lower price to earn you a profit. Learn to correctly identify the patterns v Approach short selling with diligence and a familiarity with the risks v Understand investors can't win every time STEP 2 BORROW THE STOCK Lend me 1000 shares Short selling is the sale of a security NOT owned by the seller. Shorting is taking out a loan from a broker who is willing to give you those -1,000 shares when they have shares available to short. STOCK v Keep a list of brokers handy who always have shares to short. v Shorting penny stocks is not illegal. Many brokers don't have the tools to short sell penny stocks and therefore won't allow investors to do so. STEP 3 SELL THE STOCK An investor borrows the 4$ per share stock and immediately sells it in the market. STOCK Here's 400o$ STEP 4 WAIT FOR STOCK PRICE TO DECLINE If an investor is right about a stock price dropping $2/share when the pump was over and the dump was on, a position of -1,000 shares would have made roughly $2,000. TODAY TOMORROW STEP 5 BUY BACK THE STOCK The profit arises from the difference between the Here's 200o$ stock's price at the time it was borrowed and the price at which it was subsequently purchased. STOCK v A negative times a negative is a positive. 1,000 x -$2/share = $2,000 profit STEP 6 RETURN THE STOCK Returning your 1000 shares. Will come back again. Deliver the stock to the individual from whom the investor initially borrowed. And repeat the process when you next identify an opportunity. Remember,if a company is worthless, even 1 penny per share would стоск mean it is overvalued. TIM TIMOTHYSYKES.COM SOURCES: http://www.timothysykes.com/2013/05/how-to-short-sell-penny-stocks-faqs/ http://www.investopedia.com/ask/answers/o6/otcpinksheetshortselling.asp %24 %24 %24