In the beginning of my day trading journey using Timothy Sykes Tools I learned all about pump and dumps, but I never had the opportunity to short one. Well today with Interactive Brokers I was able to get shares. I tried to short when it was up at $8 but there were no shares available. The chart was looking over extended being up 100% on the day and knowing how the shippers have not been able to hold their spikes from DRYS a couple weeks ago I thought this is a great short.
Well I got shares to short at 7.17. I was trying for 700 shares and only got a partial fill at 500. Then as soon as I got my notification that the shares were sold I went to check the stock and boom it was halted.
Immediately I went and googled Nasdaq halted stocks an sure enough there was GLBS with the T12 code : Pending more news. Then there were rumors on Twitter it was going to be halted for 30 days. The last news that I had seen was there was a new executive joining the team and it skyrocketed from $3.80 up to$8 10:50-12:20. With such a dramatic increase in an hour and a half it seemed that is should pull back. So I thought this is a perfect opportunity for a short so I put in the request.
I was a bit hesitant that the stock was going to go up but it had already been halted twice during the day going up and usually I see the third time it tends to sell off. So as soon as I had the shares I shorted.
The afternoon was exciting while patiently waiting to hear why this stock doubled. The last time I was in a stock halted pending news it was ENF where there was news of them being bought out by a Japanese company and sure enough this one spiked once the news was released that the offer to buy them was confirmed.
So not knowing the news was a bit tense but exciting. Knowing that DRYS had just been through a similar situation and sure enough after the halt the stock opened down 50%. As soon as I saw the update on the Nasdaq site for the stock to reopen at 3:35 pm I went in search of the news that was released.
I found the news that they were due to issue shares at 1.60. I had an order in earlier to cover at 4.17 for a conservative $3 a share profit. Well I then saw on level 2 that the sellers lowered their Ask price to 4 so I dropped my buy to a more agressive 2.17.
I was actually on the phone with my husband when it opened and it was open at 2.88 for roughly 18 seconds before they halted the stock again. I thought ok it will continue dropping further so I was even more aggressive with 1.87 for my covereage. It reopened and started dropping. I saw it going down and thought I don’t need to be greedy I’ve already made over $2000 on a $3585 position. So I set a trailing stop for .17 and let it work. No matter what happened if it continued down I would still profit. So my position locked in profit at 2.795.
It was an exhilarating experience to have the opportunity to short a pump and then have it halt and go in the perfect direction and open with not a 50 cent gap but almost $5 gap. I only wish my whole position had been filled. A great trade with 61% return on investment the same day.
As I always say Carpe Profit one trade at a time you will see them grow your account. The trades will not always provide a 61% return but they all grow your account.
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