If our sp goes to $1.80 and you started shorting at $2.80, you have a 35% gain! Not bad for a couple of weeks.But what if you get the sp down to $1.80 and you have shorted /borrowed 200k shares, and you look at the ask to only see 5k shares available til you get to $2.80? You better think about this and how quick it can turn into a major loss if the asks are pulled. And another scenario for you, you succeed in getting the sp to $1.80, but before you can hit the buy button to cover your short or ring the number for your broker, the stock is halted on an offer of $50 per share. That will equate to you losing 27.7 times your money, or to put a value to it, you could lose $10,000,000 dollars on that bad bet.

Wouldn,t it be wiser to go long on this stock and maybe buy 200k shares at $2.08 and have the chance of enjoying a 2300% return. I know you don,t have much money at risk when you first borrow the stock to sell, but maybe you are forgetting your obligation to buy the stock back?

If you need more help with understanding the math, PM me or BOW.