OK, here is the correct information.
This is for IPOs that are less than 30 days old, after 30 days, as you know, the IPO usually is marginable.
I called the clearing firm that clears for one of my accounts yesterday and got two different answers: the first person said I COULD short an IPO on day two if the stock was available, the second person said "the exchange rule is you may not short an IPO for 30 days". (Both of these people were Series 7 licensed, I asked.)
So, at least I was not alone in my confusion! <GGG>
This morning I dug further and here is the actual reality: the rule has been changed.
The new rule, simply stated, is this:
Each clearing firm now have their own individual guidelines on each individual IPO stock, on a stock by stock basis.
A clearing firm WILL margin a specific IPO on some occasions, usually it is 70%, not 50%, which means you pay 70% cash. This was news to me, too. (Obviously one would have a better chance of obtaining these shares from one of the underwriters of the IPO, but that firm may not be totally excited about lending out their shares to be shorted against...)
If the clearing firm WILL NOT margin the IPO, then that is the end of the conversation.
IF the clearing firm WILL margin the IPO, then that IPO is marginable, and IF the clearing firm has the [marginable] IPO available to be borrowed, you CAN short it.
So simply stated, you call your broker and ask him/her to call his/her clearing firm and ask if the IPO is MARGINABLE. Then, you ask if they have shares to borrow. If they do, you ask for shares to short.
Remember that there is a possibility that the person you are talking to may be unaware that the rule has changed, and it is now possible to short an IPO.
If this is something that somebody didn't want everyone else to know, I'm sorry. <GGG>
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