From: Hkentlewis@aol.com
Sent: Thursday, May 24, 2001 9:32 PM
To: rule-comments@sec.gov
Subject: S7-24-99

Greetings.  I would like to take this opportunity to bring to your attention 
that the current schedule of short reporting allows Market Makers and 
Brokerages an advantage over individual investors.  By virtue of when the 
information is collected, disseminated and then released the Market Makers 
and Brokers have access to short data prior to options expiration.  This 
information can then be used to their benefit in thinly traded issues by 
allowing them to apply buy or sell side pressure to maximize their gains by 
price positioning the stock to make options worthless or worth less than they 
would be otherwise.

With the recent losses that many experienced in the stock market a large 
number of people who have never traded options before have begun to trade or 
at least investigate trading without being aware of how easy it is for the 
professional traders of those options to use part of the potential profits 
that they can receive from the small investor's options expiring worthless.

I was on the receiving end of this at one point and now better understand 
just how easy it is if you have access to cash, shares to short, and the 
knowledge of how many shares are shorted already.

If you buy a call position and own shares of the stock, the Market Makers or 
brokers can borrow your own shares and short them to help keep the price down 
and thus help make your options worth less.

In my opinion there too little information being released about short sales.  
Persons with extreme resources such as a hedge fund can afford to short a 
stock nearly out of existence.  Also, due to the nature of the system they 
can mask what they do by shorting heavily just after reporting day to make 
call options worthless and then have the majority, if not all, of the shares 
covered by the next short reporting day.

With the beating many people have taken in the markets in the last year it 
has become a shorters paradise because of the general panic and fear that 
exists.

Someone who has lost a significant amount of money and then gone to cash has 
a natural hesitation to put that cash back in the market if they see it 
continue to drop.

Thus the shorts can start and perpetuate what can be considered a "self 
fulfilling prophesy.

Thank You for your time.

H. Kent Lewis