How I made $1,600 (20%) by short selling pump & dump XSUNX, Inc (Public, OTC:XSNX)

XSUNX (OTC BB: XSNX) was pumped this morning by StockPreacher (whose pump of ALAN was an awesome short for me months ago) and Beacon Equity (both are owned by the same people). They were paid 900,000 shares by the company to promote it. Timothy Sykes had a good blog post about this pump. You can see the pumper’s disclaimer below. One nice little touch is that Beacon Equity’s disclaimers are images so it is harder to search to see how much they were paid for each pump.

xsnx_disclaimer
(click here for a larger 1-day chart of XSNX).

XSNX
XSNX

As a result of the pump the stock jumped from $0.12 to $0.22 in under 15 minutes. I sold short 35,000 shares at $0.202 at Interactive Brokers just as it started to fade off of its day’s high. The one problem with short selling such a cheap stock is it is not only not marginable, but short selling stocks under $2.50 per share requires $2.50 per share in cash. So short selling this stock required that I use $87,500 in cash. Still, It was a super-easy short with little risk. Except for the first minute, this trade was never in the red. The stock fell quickly with only anemic bounces. Just over one hour later I covered my short position at $0.156 when I got bored and netted $1,612.37 with a profit margin of 22.8%

By the way, it is still not too late to sign up for Tim Sykes’ Las Vegas Seminar on October 18th and 19th. If two more people sign up using my affiliate link in the next couple days then I will go to the seminar too! See my previous post on the seminar for all the great reasons you should go (and a special benefit–a phone consultation with me–for those who sign up using my affiliate link).

I should also point out that I informed my Twitter followers about my intention to short XSNX even before I got filled on my short sale order so any of them with Interactive Brokers could have easily made 20% shorting this pump & dump with me!

Disclosure: No positions. I have a disclosure policy.

0 thoughts on “How I made $1,600 (20%) by short selling pump & dump XSUNX, Inc (Public, OTC:XSNX)”

    1. Sogoelite is a real-time trading platform offered by Sogotrade. I pay $10/month for a data fee for level 1 price data and my commissions are $0.004 per share. I hate the fills, the platform is okay, so I only use it for shorts when IB doesn’t have them.

    1. The spike was nearly vertical so I started shorting once the stock’s ascent slowed and its momentum wore off. Because I shorted 35k shares I didn’t want to wait until it actually started falling. As to being right near the top that is luck … it could’ve gone a bit further, in which case I would’ve averaged up. It is always a good risk/reward to short something that is up 100% in a few minutes only on a pump and dump.

  1. Great job Reaper!

    I have just started following you, hope to meet you in Vegas — I am signing up today (using your link of course)

    –MostlyLucid

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