Lessons Learned Shorting Micro-Caps

In March, I wrote the article:

Ticker Confusion Leads to Opportunity Short ZOOM.

This is a follow- up article to share:

  1. How the trade worked out.
  1. Lessons learned.

In short (pun intended), the trade worked.

I was able to short 800 shares of ZOOM on March 17, 2020 at an average price of $9.84 for total proceeds of $7,871.

I bought back the stock (ticker had changed to ZTNO) on April 14, 2020 for $0.25 a share netting me a profit of $7,671.

Not bad for a month trade!

Here are some tips on how to find “obvious shorts” as well as some lessons learned.

Keep an eye out for anomalies like this. Every once in a while you will see a market anomaly that is creating an obvious short.

You can find them on Twitter.

In January 2020, I was alerted to an opportunity to short Alpha Pro Tech thanks to this tweet: