Why does Mauck sometimes say he would short a particular OTCBB stock?
Many times, holders of OTCBB stocks are riding winners, but do not know the points at which high levels of risk exist for longs on upside moves. Mauck attempts to identify where those levels of risk outweigh the potential rewards. He attempts to identify OTCBB issues as short sale possibilities in his trading model for two reasons. The first reason is that he wants to emphasize, that in his opinion, the risk has become greater to the upside, than to the downside. The second reason, is that LSR is as equally devoted to providing information for professional Market Makers as it is for individual traders and investors. Market Makers need to indentify price points at which taking in stock becomes dangerous for their P&Ls. Look at it this way, if a Market Maker may be able to profit from shorting an issue instead of going into the market to buy it in an attempt to fill an order, why would an individual trader or investor want to continue to hold that same issue? A lower entry point might be
