Rob, There should be no real price differential between exchanges because arbitragers will step in and trade the thing away. When I say freely traded, I just mean that the paper flows without restriction.

The second question is a very interesting one. One I was actually pondering this morning. The answer is that it depends on the stock that is actually trading, the liquidity (or illiquidity) in other words, the volume of shares moving. All these things tie into the most important element of all, investor psychology. The short sellers want to mess with a potential victim's mind, and the forementioned attributes of a stock make it much easier for them to do that. The ideal candidate for a short seller to attack is one that has low volume and a smaller market cap. These guys can sometimes move the price on Kimber with just a few thousand shares. This creates the illusion to the novice investor that the value of the company is actually changing when it is not. But it spooks people. The small guy see Kimber going from 165 to 150 in a single day and mistakes price action for true valuation. He bails out and the game is lost almost before it is even begun. What is this like: This is The Corbomite Maneuver in real life. Essentially a bluff in Poker that wins the pot. So to answer your question: What the short seller can accomplish has everything to do with how well he can scare people. A smart short seller, who bides his time, and looks for openings, who is working with a stock that he can move several points with carefully placed trades, can accomplish a great deal working with only a small number of shares. If I were to go into the market and sell 100,000 of Kimber at market right now, things would happen with the stock, I might move it 6-7 points. If I were to sell 100,000 shares of Apple Inc. at the market, nothing would happen to the share price. As far as most of the positions being limited to 10%, think of it again as a poker game. These guys always know that sooner or later they are going to come up against the eric King's and Jim Puplavas of the world who are going to call their bluff. When this happens, they are sunk, so they don't want to overextend themselves too much. 10% isn't a magic number, but experience tells the players over time that the least amount of potential damage happens around that range. Five percenters don't make as much money and twenty percenters get creamed too often. It's a comfort zone based on experience. Bull