The difference is that short selling listed stocks is subject to the "uptick" rule, and short selling marginable OTC stocks (NASDAQ) is subject to the "bid test rule."
The "uptick" rule for listed stocks says that a short sale must be executed either at a price higher than the previous price, OR at the same price as the last sale executed, if the sale prior to that was positive. In other words:
19 20 20 19 19
From 19 to 20 is an uptick (ok to SS);
20 to 20 is a zero plus tick (ok to SS);
20 to 19 is a downtick (no SS);
19 to 19 is a zero minus tick (no SS);
The bid test rule says that if the spread is 1/16 or wider, the short sale must be executed at 1/16 or more above the present bid price. If the spread is less than 1/16, say, 1/32, the short sale can be executed AT the bid price.
All of this, of course, assumes that there is no "affirmative determination," that which verifies that in some form (long sale, convertible tendered for conversion, bank escrow receipt) the stock is already in the possession of the seller.
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