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The True Darkside of Penny Stock Shorting

If you’ve spent any amount of time at all on message boards or social media in the world of penny stocks, I’m sure you’ve heard people start to throw around “the shorts”. Whether they’re being blamed for a falling price or whatever, the point is… people are talking like “shorts” are a routine part of the penny stock market. Please… watch this video with an open mind and when you consider the mathematic facts, you should be able to see and admit that the darkside of risk that comes along with penny stock shorting truly makes it NOT worth doing.

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Transcript:

I want to establish some context here and talk aboutthe true severity of shorting.Especially when it comes to the world of penny stocks.The reason I wanted to address this topic is,especially in the world of penny stocks,you see the shorts being blamed, you see it's theshorts this, the shorts that, all the time being thrownaround as reason for this, that, or the other.And it really doesn't make much sense when you juststop and think about it from how bad things couldactually go type perspective.And I realize those people that are always blamingthe shorts, there's two groups of people,there's the pumpers that, they know why the pricesare going down because they're selling,they're dumping their shares but they obviously don'twant the sheep to know that so they need to blamesomebody else.How convenient, let's blame the shorts.The other type of people that are always blaming themare more so just the ignorant people.And it's okay to be ignorant, I was probably more soignorant than anybody when I first got into stocks.But ignorant in the fact that they just don't understandthis true severity of shorting.Meaning they understand shorting means people wantprices to go down.And yeah, that's true, people want prices to go down.But in the world of penny stocks and the way shortingactually works, there's a lot more to it than that.And when you stop and just pause and think aboutkind of worse case scenarios that can really actuallyhappen in the world of penny stocks,especially when you see how some of these stocksmove to the up side, it really begins to saywho would really do that?Who would actually take on that kind of risk.And here's the hint, nobody.If anything, the market maker doing it for a splitsecond in order to create a market.But they are by no means going short in the sense ofthey're trying to drive prices down.And this is gonna be why, because there can besevere consequences.So this is definitely gear towards those peoplethat are new to shorting, if you understand how shortingworks in all it's facets, that's fine you probablydon't need to watch this video.If you're a pumper then you already understand,you're not gonna watch this.And if you're somebody that just believes intinfoil hat theories and conspiracy theories,then you're probably just gonna keep your head buriedin the sand and you don't need to watch this video.But if you want to have a true open mind and gaina true aspect and understanding of shorting,just understand this.That let's say you have an account that is $500.And let's say that there is some sort of penny stockout there that is, let's just call it at .01,we'll keep it nice and easy.And somebody shorts that.And let's say that after it gets shorted it doessomething like this, where it goes up to 10 cents now.And the way shorting works, as it goes up,the shorts are losing money.That's not what you want to see.But what a lot of people just kind of get,"Yeah, no kidding, what is the point you're"trying to get at?"Let's actually look at this math.This is very severe math where people nonchalantlythrow around all of the shorts this, the shorts that.But who would want to risk this?Risk what? What is this?Well this is a huge gain, as in this gain right herehas 100% attached to it many times.So let's just call it that.There are lots of 100%, multiple 100% that have occurredif something goes from one to 10 cents.It's not like it just doubled, it's doubled againand again and again.I realize that's (mumbles).But let's now take what this actually means to a short.If you go long on something and you have an accountthat's $500 and now say you,"Yeah, I went long and I lost 100% of it."What does that mean?That means you lost your entire account,that $500 is zero 'cause you lost your entire account,100%.But a short has to worry about potentially losingtheir account over and over and over again.The S's.In this move here, that is what has happened,is a short is at risk of not only losing that $500which would come with the first 100% loss, right?So if this were to go to one to two cents,that's 100% gain against them, that's gone.But that doesn't mean that they're out.What about, so we have that 100%,what about the next 100%?There's another $500 that now they owe.Owe who? Well a broker.Hey look there's another 100% that it just went.Well there's another $500 that they owe.Oh look, there's another 100% that happened, guess what?Yeah, imagine another check mark right there,there's another $500 that they owe.So not only did they lose the entire $500,they have continued to lose their account over and overand over again with whatever that loss is.And yes, theoretically speaking, this is possible.But this is also why nobody in their right mindis going to be shorting penny stocks becausethey understand that, "Wow, I can lose my account"over and over again."And then on the down side, so think about it,taking on all that risk, which if you're being open mindedand you can just count to 10 'cause you understandthat basic of math, you know that's really badto take on something where you can literally just,"Wow, I just lost my account, oh again, and again."And to take on all that risk for what?What's the best case this could do?That could fall down and we'll just say zeroand that will give you 100% gain.So your reward that you're willing to take onand potentially get with the perfect trade is 100%.Yet your risk is losing multiple 100%?Does that make sense to anybody?No pun intended, does that make sense?It better not.Or it should make sense because if you're thinking,"That makes great sense and I'm gonna start to do that,"that's not good.Shorting of penny stocks can carry very, very severeconsequences and there's a lot more to it than justsitting there and watching a stock that goes uphundreds of percents.Some of these go up thousands of percents and just saying,"Oh yeah, now all the shorts are stepping in,"all the shorts are stepping in."At some point, with the way this math works,all the shorts would be bankrupt because all it takesis one of these where you get multiple hundredpercents against you, and if you've been aroundlong enough you've seen something go from a pennyto 10 cents and much higher.That's literally, that's wreaking havoc on peoplethat are shorting, if they actually are.And again, they're not, why?Because people that would be shorting,they kind of get math, they understand mathand they realize, you know what,this is a little bit too risky."But Clay, you short, I've seen your live trade videos,"yes, I short.Do you ever see me shorting on one cent stock?No, why?Because of this right here.I understand the severe consequences that arepotentially at risk that can happen in penny stocks.So I'll stick to big boards where it's highly unlikelythat a stock's gonna go from $50 to 100, to 150and then add up that quick.Could it over time?Yeah, but not as quickly as what stocks can jumpin the world of penny stocks.So the next time you see somebody out there blamingthe shorts for a penny stock going down,just realize they're falling into one of two camps.They're either a pumper and they need somebody to throwunder the bus so they sheep don't get mad at thembecause they're actually the ones dumping,or two, it's somebody that's ignorant and doesn't quiteunderstand this concept.So I don't know, maybe send them the video or I guessif you want you can just leave them and continue to be,leave them in their ignorance, I guess that's up to you.But just stop and think about it,it's easy to throw out shorts, and shorts, and shorts,but when you understand the math and the possibleseverity behind it, it just doesn't make any sense.If you are out there trading alone currently and maybeare in the market looking for a community to jointo assist you in your trading or to just help yougive you another set of eyeballs,then I do have a private trading community whereyou can trade alongside me and other experienced traders.So what you see popping up on the screen right nowis both an information link,so if you click on the inner circle one,that is going to take you to the page where I explainall the details of what exactly comes with the community;both the chat room and the newsletter.And then the other image that just popped upis a behind the scenes tour where you can seeexactly what is going to be contained withinthe community.I take you through, like I said, a behind the scenestour of everything and that way you'll know preciselywhat you are getting when you join.So definitely check that stuff out if you areinterested and thinking about wanting to joina community and let me know if you have any questions.

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