How To Turn $1,000 Into $3.3 Million Short Selling Penny Stocks

No joke, this is an email I got the other day, the name and ticker has been deleted to protect the guy from getting his ass beaten:

hi tim, i have been wondering about short selling penny stocks forever and to me it makes complete sense. i just came across an article “How To Short Sell Pumped Up Penny Stocks” on yahoo.com via tradingmarkets.com and came across your name.

this is what i had in mind…as this example is a public stock that a group of friends on mine started up

stocker ticker: XXXX
issued at 2 dollars a share on 9/05/2007
currently trades at 0.0006 (july 24 2007)

lets say i shorted 500 shares of this stock on 9/05/2007{1000 dollar initial investment)

For the next few days i decide to buy my stock(get out of it) at an average price of .0006 cents a share.

The question i have to ask for you, would my profit from beginning til now be roughly 3.3 million.

This is my reasoning. I sold 500 shares at 2 dollars and its now worth .0006 cents a share. It has lost a value of 3333 times its initial value (which is good for me because i shorted the stock). So i took that 3333 and multiplied it by my initial investment of 1k. Now is my logic correct and did i just make 3.3 million in this hypotheticl but real life scenerio?

Wow. WTF kind of f$%^&ed up up thinking is this? Does that mean you can make $6.6 million off a $2,000 investment? Screw it, maybe you wanna make $33 million off a $10,000 investment? Hell, why do we even need to stick to any mathematical rules whatsoever–you should be able to turn $1 into $1 billion through short selling penny stocks, right? Sure, why not!

When I say the world knows sooooooooooooo little about short selling, let alone short selling penny stocks, this is what I’m talking about. You cannot imagine how friggin confused/uneducated/dumb people there are–it’s not all their fault–much of it is due to the trading “teachers”/”coaches” being uniformly fraudulent/incompetent and the fact that some people just aren’t meant to have any money whatsoever.

People please get my PennyStocking DVD package, it’s been known to prevent cases like the one listed above.

For the record, in order to calculate one’s short selling profits, you take entry price (the price at which you short sell your shares) minus your exit price (the price at which you buy to cover) multiplied by the number of shares you have…so in this case, it’d be $2 – $.0006 x 500 shares = $999.70 and then you pay some commissions. It’s a great little strategy, but it’ll take lots of pumps and dumps to turn a few thousand into a few million…

Posted in Basics, idiots

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  • http://www.investorslive.com investorslive

    LOL I wish it worked that way!

  • http://www.investorslive.com investorslive

    LOL I wish it worked that way!

  • MikeY

    LOL

  • MikeY

    LOL

  • MARC

    Wow that guy should go back to grade school.

  • MARC

    Wow that guy should go back to grade school.

  • http://collegepennystocks.blogspot.com UFgemini

    its sad but i bet their are millions out there just like him

  • http://collegepennystocks.blogspot.com UFgemini

    its sad but i bet their are millions out there just like him

  • YoungGunz

    OMFG, how fucking hard is it to google how short selling works. Wikipedia explains it pretty clearly. Why some people are so compelled to email someone else a question that they figure out in about 5-mins. on google.

  • YoungGunz

    OMFG, how fucking hard is it to google how short selling works. Wikipedia explains it pretty clearly. Why some people are so compelled to email someone else a question that they figure out in about 5-mins. on google.

  • http://www.feedthebull.com FeedTheBull

    Awesome…Sign me up. I want to turn $0.01 into $100,000…Sykes, can you help!

  • http://www.feedthebull.com FeedTheBull

    Awesome…Sign me up. I want to turn $0.01 into $100,000…Sykes, can you help!

  • Reaper

    LOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOL

  • Reaper

    LOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOL

  • getshorty

    You are a kind soul for not putting his name… I can imagine people putting his house on fire.

  • getshorty

    You are a kind soul for not putting his name… I can imagine people putting his house on fire.

  • http://www.stocksnquan.blogspot.com/ ptramsey

    not to mention what kind of volume is a stock getting at .00006? dumb ass no one wants to buy that crap at that price

  • http://www.stocksnquan.blogspot.com/ ptramsey

    not to mention what kind of volume is a stock getting at .00006? dumb ass no one wants to buy that crap at that price

  • mikeswords

    that’s the highlight of my work day….

  • mikeswords

    that’s the highlight of my work day….

  • getshorty

    20 000 shares of pgti have changed hands during the last hour with the price fixed at 5.40…… looks like accumulation before taking off? any seasoned technical analyst around?

  • getshorty

    20 000 shares of pgti have changed hands during the last hour with the price fixed at 5.40…… looks like accumulation before taking off? any seasoned technical analyst around?

  • Randy

    Sounds like a real estate broker in the making.

  • Randy

    Sounds like a real estate broker in the making.

  • pwr_Hustla

    Hi Tim,I literally fell out of my chair when I saw this, You have got to be kidding me, Look Im a newbie investor and Tim is trying to teach us strategies, but common sence and looking stuff up on google is elementary… WOOOOOOOOOW

  • pwr_Hustla

    Hi Tim,I literally fell out of my chair when I saw this, You have got to be kidding me, Look Im a newbie investor and Tim is trying to teach us strategies, but common sence and looking stuff up on google is elementary… WOOOOOOOOOW

  • getshorty

    Nevermind, this bitch is going south, may bounce from January $ 5 support, if not, we are clear. Looks like a bearish engulfing pattern http://www.investopedia.com/terms/b/bearishengulfingp.asp

  • getshorty

    Nevermind, this bitch is going south, may bounce from January $ 5 support, if not, we are clear. Looks like a bearish engulfing pattern http://www.investopedia.com/terms/b/bearishengulfingp.asp

  • RJ

    Max gain shorting $2 is $2 per share. 500 shares = $1000.
    Max loss = infinite.

    I’m guessing Tim tells all how to put stops to prevent a massive loss.

    Imagine having shorted Walmart or McDonald’s when they IPOed.

  • RJ

    Max gain shorting $2 is $2 per share. 500 shares = $1000.
    Max loss = infinite.

    I’m guessing Tim tells all how to put stops to prevent a massive loss.

    Imagine having shorted Walmart or McDonald’s when they IPOed.

  • manny the trader from cancun

    TIMM REV IS A SUPERNOVA PATTERN, if you study the statastics you can see is gonna break out on friday or tuesday,, maybe a quick 35%.

    THE ONES you like REAPER.

  • manny the trader from cancun

    TIMM REV IS A SUPERNOVA PATTERN, if you study the statastics you can see is gonna break out on friday or tuesday,, maybe a quick 35%.

    THE ONES you like REAPER.

  • Alex

    shorty – going back to your stop getting picked…it once happened to me too and I never even saw the bid go down to it…some market maker just swooped down about .20 or so and took my stop order….I remember it was still a little bit profitable trade cuz I had raised the stop but I was still pissed cuz thanks to that happening i ended up missing .50 or so. It’s sooo easy for them to do that in illiguid stocks esp. AMEX or OTC because there’s little accountability and little transparency. Stops are really better and safer to use with liquid NYSE or NASQ stocks. With less liquid stocks I like to use a limit stop where I can set the trigger price and the limit price….you can set the limit price a little below the trigger price and it’s rare that they’ll skip your stop. With a pure limit stop where the limit price is the trigger price, you can easily get skipped if only one order fills at the trigger price and then the bid drops.

    One of my trading strategies is to try to buy some of those orders…when the MMs “swoop” down and the stops go off. A classic example today is ARNA – it was in a 2-3 month perfect uptrend so there’s guaranteed to be tons of stops anong a trendline and along the 20-day MA…so I would attribute the big dip today to stop orders mostly rather than anything bad…there’s a good decent chance the uptrend will pick right up again. Same thing happened with HCKT the other day….strong uptrend, slight dip gets bigger as stops go off and you have a buying opportunity…went from $5 to $6 in a 2-day cycle.

  • Alex

    shorty – going back to your stop getting picked…it once happened to me too and I never even saw the bid go down to it…some market maker just swooped down about .20 or so and took my stop order….I remember it was still a little bit profitable trade cuz I had raised the stop but I was still pissed cuz thanks to that happening i ended up missing .50 or so. It’s sooo easy for them to do that in illiguid stocks esp. AMEX or OTC because there’s little accountability and little transparency. Stops are really better and safer to use with liquid NYSE or NASQ stocks. With less liquid stocks I like to use a limit stop where I can set the trigger price and the limit price….you can set the limit price a little below the trigger price and it’s rare that they’ll skip your stop. With a pure limit stop where the limit price is the trigger price, you can easily get skipped if only one order fills at the trigger price and then the bid drops.

    One of my trading strategies is to try to buy some of those orders…when the MMs “swoop” down and the stops go off. A classic example today is ARNA – it was in a 2-3 month perfect uptrend so there’s guaranteed to be tons of stops anong a trendline and along the 20-day MA…so I would attribute the big dip today to stop orders mostly rather than anything bad…there’s a good decent chance the uptrend will pick right up again. Same thing happened with HCKT the other day….strong uptrend, slight dip gets bigger as stops go off and you have a buying opportunity…went from $5 to $6 in a 2-day cycle.

  • Reaper

    Manny, REV is up on good earnings? Why short that?

  • Reaper

    Manny, REV is up on good earnings? Why short that?

  • Alex

    MikeY – I’m still in PDO … it’s not a good daytrade anymore but I’m staying in cuz it’s still a good swing trade setup – it’s still green on the day and it’s looking like it will form a bullish engulfing candle. And there should be plenty of shorts to squeeze out of it.

  • Alex

    MikeY – I’m still in PDO … it’s not a good daytrade anymore but I’m staying in cuz it’s still a good swing trade setup – it’s still green on the day and it’s looking like it will form a bullish engulfing candle. And there should be plenty of shorts to squeeze out of it.

  • getshorty

    Thks alex, makes sense

  • getshorty

    Thks alex, makes sense

  • Alex

    NCOC – killer bullish engulfing candle pattern forming there – nice swing trade set-up

  • Alex

    NCOC – killer bullish engulfing candle pattern forming there – nice swing trade set-up

  • http://www.getflashmedia.com ivegotstylekid

    would be nice to make that in less than a year with only 1k

  • http://www.getflashmedia.com ivegotstylekid

    would be nice to make that in less than a year with only 1k

  • Alex

    shorty – watch ARNA the rest of the week – betcha it gets back to at least $6.4 – stop-loss trigger-fest brought it down – **they reported earnings today but I don’t think it could be viewed as bad…it was what everyone should have expected. The beauty of a trade like ARNA is the huge risk/reward ratio – you could use 1:4 or even 1:5 for that…looking fairly good itraday – slight uptrend after the morning plunge

  • Alex

    shorty – watch ARNA the rest of the week – betcha it gets back to at least $6.4 – stop-loss trigger-fest brought it down – **they reported earnings today but I don’t think it could be viewed as bad…it was what everyone should have expected. The beauty of a trade like ARNA is the huge risk/reward ratio – you could use 1:4 or even 1:5 for that…looking fairly good itraday – slight uptrend after the morning plunge

  • Alex

    f$#$ – I would soooo buy ARNA right now but only have $300 available

  • Alex

    f$#$ – I would soooo buy ARNA right now but only have $300 available

  • Alex

    I might be stuck in VNDA for awhile. Right now I’m breakeven but I don’t really want to sell the shares cuz I think it has the potential to gain 50%-100%

  • Alex

    I might be stuck in VNDA for awhile. Right now I’m breakeven but I don’t really want to sell the shares cuz I think it has the potential to gain 50%-100%

  • http://www.getflashmedia.com ivegotstylekid

    alex why would you buy arna, there’s no resistance for downside until the low 5′s

  • http://www.getflashmedia.com ivegotstylekid

    alex why would you buy arna, there’s no resistance for downside until the low 5′s

  • getshorty

    Downtrending stock giving back its dead cat bounce, I think you’ll be grateful you didn’t have money to buy it. I ain’t touching that crow.

  • getshorty

    Downtrending stock giving back its dead cat bounce, I think you’ll be grateful you didn’t have money to buy it. I ain’t touching that crow.

  • rr

    If you shorted a 500 shares of XYZ at $2 per share ($1000) and then XYZ went to $0.00006, you would make 99.97%.

    [(500*$2)-(500*.0006)]/$1000=.9997*100%

  • rr

    If you shorted a 500 shares of XYZ at $2 per share ($1000) and then XYZ went to $0.00006, you would make 99.97%.

    [(500*$2)-(500*.0006)]/$1000=.9997*100%

  • manny the trader from cancun

    rev is high again snd near 52 week high

  • manny the trader from cancun

    rev is high again snd near 52 week high

  • getshorty

    Rev looks supernovish, reserving just in case it reverses by the end of the day, maybe if I hadn’t had that bjgp loss earlier would have some balls to go long, not now.

  • getshorty

    Rev looks supernovish, reserving just in case it reverses by the end of the day, maybe if I hadn’t had that bjgp loss earlier would have some balls to go long, not now.

  • PCola

    I’m having a pretty shitty day today, but that made me laugh. Thanks.

  • PCola

    I’m having a pretty shitty day today, but that made me laugh. Thanks.

  • noobtrader.08

    Funny stuff!

    On a realistic note…

    I told Tim I would detail my trades (and yes I’m signed up through Covestor), to support the TIM business model. Today, I made my first trade, with real money, and want to share with you how it turned out, and the lesson I learned from it.

    For the record it was not one of Tim’s picks and it wasn’t a short play either.

    The ticker was (ILE) – Huge pre-market hype; ILE was up 140% before the market opened. I watched it from 6:30 AM PST (market open) to 6:41 AM PST. I saw someone post in the GOTS chatroom @ 6:37 AM PST, that (ILE) broke its HOD, so I decided (or convinced myself) that I would/could ride the breakout momo train for $.40 to $.60 cents/share.

    Well, my ENTRY point was excellent! I bought 1,000 shares at $1.815. I watched the chart for a solid 10 minutes go sideways, with little fluctuation. It bounced back and forth $.05 to $.10 cents. I kept telling myself that it would go up…

    As I caught myself hypnotized by this lack of movement, I started to get a tightness in my chest, kind of like when you`re getting ready to go on stage to perform or speak in front of a large group of people. My mind started fucking with me a bit… I got

  • noobtrader.08

    Funny stuff!

    On a realistic note…

    I told Tim I would detail my trades (and yes I’m signed up through Covestor), to support the TIM business model. Today, I made my first trade, with real money, and want to share with you how it turned out, and the lesson I learned from it.

    For the record it was not one of Tim’s picks and it wasn’t a short play either.

    The ticker was (ILE) – Huge pre-market hype; ILE was up 140% before the market opened. I watched it from 6:30 AM PST (market open) to 6:41 AM PST. I saw someone post in the GOTS chatroom @ 6:37 AM PST, that (ILE) broke its HOD, so I decided (or convinced myself) that I would/could ride the breakout momo train for $.40 to $.60 cents/share.

    Well, my ENTRY point was excellent! I bought 1,000 shares at $1.815. I watched the chart for a solid 10 minutes go sideways, with little fluctuation. It bounced back and forth $.05 to $.10 cents. I kept telling myself that it would go up…

    As I caught myself hypnotized by this lack of movement, I started to get a tightness in my chest, kind of like when you`re getting ready to go on stage to perform or speak in front of a large group of people. My mind started fucking with me a bit… I got

  • ddigia1

    That’s great. Pretty crazy. This person should consider taking a basic math course at a community college before diving in to any type of trading. LOL Thanks, this article put a smile on my face.

    noobtrader.08, sorry about your losses… humble of you to detail your trade and cite lessons learned. Thanks! $91 loss: not that big a deal. Learn your lesson and move on :-)

  • ddigia1

    That’s great. Pretty crazy. This person should consider taking a basic math course at a community college before diving in to any type of trading. LOL Thanks, this article put a smile on my face.

    noobtrader.08, sorry about your losses… humble of you to detail your trade and cite lessons learned. Thanks! $91 loss: not that big a deal. Learn your lesson and move on :-)

  • Reaper

    Getshorty – REV had good earnings!!!!!! What is wrong with you?

    ” AP
    Revlon 2nd-quarter profit tops expectations
    Thursday July 31, 1:57 pm ET
    By Betsy Vereckey, AP Business Writer
    Revlon posts 2nd-quarter profit that tops Wall Street expectations on strong sales abroad ”
    http://biz.yahoo.com/ap/080731/earns_revlon.html?.v=2

  • Reaper

    Getshorty – REV had good earnings!!!!!! What is wrong with you?

    ” AP
    Revlon 2nd-quarter profit tops expectations
    Thursday July 31, 1:57 pm ET
    By Betsy Vereckey, AP Business Writer
    Revlon posts 2nd-quarter profit that tops Wall Street expectations on strong sales abroad ”
    http://biz.yahoo.com/ap/080731/earns_revlon.html?.v=2

  • total_keops

    Short REV 1.35. Not that confident :-|

  • total_keops

    Short REV 1.35. Not that confident :-|

  • http://theproficientinvestor.com theproficientinvestor

    classic letter!

    you should have titled this post “Can You Trade Better Than A Fifth Grader?”

    that’s the fuzziest math I’ve ever seen.

  • http://theproficientinvestor.com theproficientinvestor

    classic letter!

    you should have titled this post “Can You Trade Better Than A Fifth Grader?”

    that’s the fuzziest math I’ve ever seen.

  • Joker

    What’s his name and address, I wanna kick his ASS!

  • Joker

    What’s his name and address, I wanna kick his ASS!

  • Bob (VC)

    Wow, that is fantastic reasoning. I was going to ask you about something like that too Tim.

    Lets say I short sold 2 shares of GOOG at $500 ($1000 initial investment). 50 years from now Google is no longer relevant and they are about to go out of business-THEN a conglomerate of super-models sues the company for all the nudie pics they served up though their image search with out the models permission. A judge awards damages totaling $100000000000000.. Now I’m not going to do all that fancy math, but if I covered then, wouldn’t I be worth like one hundred trillion dollars?!?!?

  • Bob (VC)

    Wow, that is fantastic reasoning. I was going to ask you about something like that too Tim.

    Lets say I short sold 2 shares of GOOG at $500 ($1000 initial investment). 50 years from now Google is no longer relevant and they are about to go out of business-THEN a conglomerate of super-models sues the company for all the nudie pics they served up though their image search with out the models permission. A judge awards damages totaling $100000000000000.. Now I’m not going to do all that fancy math, but if I covered then, wouldn’t I be worth like one hundred trillion dollars?!?!?

  • Joker

    No, really I wanna kick his ASS

  • Joker

    No, really I wanna kick his ASS

  • getshorty

    Reaper, not checking the finance.google.com page, that is what is wrong with me. Too focused on the chart, would look at finance.google.com right after I see an interesting chart from now on. And this time I mean it.

  • getshorty

    Reaper, not checking the finance.google.com page, that is what is wrong with me. Too focused on the chart, would look at finance.google.com right after I see an interesting chart from now on. And this time I mean it.

  • YoungGunz

    Well, hopefully there will be some better plays tomorrow. what a boring week. Had all kinda of fun with USS and now nothing has really been wanting to develop.

  • YoungGunz

    Well, hopefully there will be some better plays tomorrow. what a boring week. Had all kinda of fun with USS and now nothing has really been wanting to develop.

  • Alex

    shorty and stylekid – you guys are right that ARNA is a long-term downtrend, but the short-term uptrend has been strong…the bulls will try to take it back up. It’s not a high probability trade like a Tim trade, but it’s very high reward to risk trade. Just look at HCKT…it’s exactly the same kind of reaction I’d bee looking for. However, the way ARNA dropped at the close was not very bullish.

  • Alex

    shorty and stylekid – you guys are right that ARNA is a long-term downtrend, but the short-term uptrend has been strong…the bulls will try to take it back up. It’s not a high probability trade like a Tim trade, but it’s very high reward to risk trade. Just look at HCKT…it’s exactly the same kind of reaction I’d bee looking for. However, the way ARNA dropped at the close was not very bullish.

  • pwr_Hustla

    I first started trading fake shares on investopedia, and the first thing i learned is Patience. Don’t worry noobtrader.08 it happens.

  • pwr_Hustla

    I first started trading fake shares on investopedia, and the first thing i learned is Patience. Don’t worry noobtrader.08 it happens.

  • http://www.timothysykes.com TIM Sykes
  • http://www.timothysykes.com TIM Sykes
  • http://www.timothysykes.com TIM Sykes

    i might be shorting the next GOOG, its doubtful, but its possible–doesnt matter, i just go into these guys for the pattern, not longterm

  • http://www.timothysykes.com TIM Sykes

    i might be shorting the next GOOG, its doubtful, but its possible–doesnt matter, i just go into these guys for the pattern, not longterm

  • Bob (VC)

    What? Is that in response to me? You know that was an attempt at humor (albeit a bad one) right..

    Tims not even reading the posts anymore, he’s just scanning them so he can get back to his girlfriend… Me thinks Timmay’s in love.. :)

    Just messin wit ya Tim

  • Bob (VC)

    What? Is that in response to me? You know that was an attempt at humor (albeit a bad one) right..

    Tims not even reading the posts anymore, he’s just scanning them so he can get back to his girlfriend… Me thinks Timmay’s in love.. :)

    Just messin wit ya Tim

  • dreamgirl

    Maybe he is…but trust me, Im worth it! ;)

  • dreamgirl

    Maybe he is…but trust me, Im worth it! ;)

  • Bob (VC)

    Assuming you’re really Tim’s girlfriend, I have one piece of advice. Don’t ever go on LiveStock, the jackals in the chat room can be vicious!!

  • Bob (VC)

    Assuming you’re really Tim’s girlfriend, I have one piece of advice. Don’t ever go on LiveStock, the jackals in the chat room can be vicious!!

  • dreamgirl

    Tim is going to hate you for saying that! He’s been begging me to go on!

  • dreamgirl

    Tim is going to hate you for saying that! He’s been begging me to go on!

  • http://beatdown.blogspot.com vo

    I do the math this way:

    $2 sold price
    $.0006 cover price

    Profit per share is then $2 – $.0006 = $1.9994

    Multiply that by 500 shares and you’ve got $999.70, not including commissions and margin expenses on the short.

    Not sure how he ever considered his $1000 as an “initial investment”–definitely he’s confused as to what shorting is.

    Lord help him if he ever gets into writing calls and buying puts! Ha ha ha.

  • http://beatdown.blogspot.com vo

    I do the math this way:

    $2 sold price
    $.0006 cover price

    Profit per share is then $2 – $.0006 = $1.9994

    Multiply that by 500 shares and you’ve got $999.70, not including commissions and margin expenses on the short.

    Not sure how he ever considered his $1000 as an “initial investment”–definitely he’s confused as to what shorting is.

    Lord help him if he ever gets into writing calls and buying puts! Ha ha ha.

  • Bob (VC)

    dreamgirl (nice screen name by the way.. Confidence is a good thing ;) )- don’t get me wrong, I would love to e-meet you on LiveStock, but I have your best interest in mind. If you do decide to come on, DO NOT, I repeat DO NOT, take anything anyone there says to heart. That includes my comments as well…

  • Bob (VC)

    dreamgirl (nice screen name by the way.. Confidence is a good thing ;) )- don’t get me wrong, I would love to e-meet you on LiveStock, but I have your best interest in mind. If you do decide to come on, DO NOT, I repeat DO NOT, take anything anyone there says to heart. That includes my comments as well…

  • SamuraiRat

    OMG gimme that ticker, i want to make fat dough.

  • SamuraiRat

    OMG gimme that ticker, i want to make fat dough.

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  • Miss Kelli Taylor

    My name is Miss Kelli Taylor. I honestly truthfully truly really do wishes that I

    could turn my pennies into ten thousand dollars by collecting pennies in my

    entire life period (100) percent.

  • Miss Kelli Taylor

    My name is Miss Kelli Taylor. I honestly truthfully truly really do wishes that I

    could turn my pennies into ten thousand dollars by collecting pennies in my

    entire life period (100) percent.

  • B guy

    Here is his real plan… 1 million clueless people x $1 a day. End of week Profit = $7,000,000! Come on people if he is that rich from all his trading, and wants to share the world his “secret” why not tell us on this page for free…

  • B guy

    Here is his real plan… 1 million clueless people x $1 a day. End of week Profit = $7,000,000! Come on people if he is that rich from all his trading, and wants to share the world his “secret” why not tell us on this page for free…

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