Hi, I am Rob. Even though I am only a beginner trader, I do have a specific trading strategy: Shorting stocks under 10$ that spike big during the day, has a high % probability of success, at least on the paper. They all go down at some point the same day, or the following trading day. I heard Tradezero has good borrows and I would like to ask if anyone is successful at shorting penny stocks at Tradezero. In specific: - Is it true that stocks under 3$ aren't marginable (therefore not treadable) at TZ? - how is your shorting penny stock experience at TZ I would really appreciate your input
Keep in mind you will have really rare outliers where a penny stock continues rising several hundreds or thousands of percent, and total allocation of your capital into any given stock needs to be small enough to survive this in case you're unable to get out. Otherwise you'll be running one of those strategies that works well for a while and then bankrupts you.
%% ALL most always- that kind of risk can be deadly.About the only one that I'm sure pulled it off[college kid/man]; did the 1999 uptrend first+ got plenty of capital. Then did the bear side; but the market was trending MUCH better, up+ down, then . I bought Tim Sykes book after reading part of his e - free book, but he had to close his hedge fund, hard to scale that + market changed........Also he had unusual good work habits,[+ unusual risk] better than mine , college age. NOT saying any should buy his book; he has free version, but i prefer paper; not saying any should even paper trade penny stocks ; but college age could work then .I think he has graduated to higher priced stock but i dont keep up with Tim Sykes
I've never traded with Tradezero, but I bet what they mean is that you can't use any leverage or additional buying power on stocks that cheap. Most brokers have restrictions like this in place. https://www.marketwatch.com/story/h...hed-and-now-i-owe-e-trade-10644556-2015-11-19 Be careful holding low float stocks short overnight. The potential is there for disaster. BPTH went from $2 to $73 just a few weeks ago. It's back under $20, but my guess is it destroyed a few accounts on the way up.
TradeZero wont let you locate/borrow shares on those priced under $1 but you can trade any priced stock and short those on the easy list in a margin account (US version anyway). All low float stocks with big percentage moves will be HTB and need to be located but they usually have some available (if priced over the $1 threshold).
Lot of criticism here but my stats don't lie. BPTH wouldn't have been a valid trade because it traded with high volume and higher price in the afternoon. I have been paper trading those overnight spikers and, for those that in late afternoon trade lower than the open, with low volume I got a success rate of 89%. The only 3 that, if held overnight, opened higher the following day, the loss was really small. TZ says I cant use margin to short stocks $1-$3: my question is, if I buy a $1-$3 with cash do i have to wait 3 days for the funds to settle? What other major difference apply if I buy cash vs margin? thank you so much