DAYTRADING Fundamentals Message Board

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To: Mama Bear who wrote (6738)	1/30/2000 9:13:00 PM
From: LPS5	Read Replies (2) of 18137

No, Bear, I'm not. OTCBB stocks are in fact not approved for margin in the U.S. under Reg T. However... ...that does NOT MEAN that they can't be short sold. Saying that OTCBB stocks cannot be short sold is a common tout's utterance, right up there with "call in your certs." I short OTCBB stocks all the time, in fact, have only been long a penny stock once - six years ago. The short selling of bulletin board stocks has to do with (a) a broker-dealer with a great, expansive stock loan and borrow department and the likelihood of being bought-in, or (b) utilizing an offshore brokerage account, whereby under foreign lending rules Reg T does not apply. What I said previously was that a short sale can only be executed in a margin account, not a cash account. That is the case. Nonetheless, that's not what I corrected you on. Your previous musing about marginability being a function of the broker was wrong. Regulation T and the marginability of securities is set forth by the Federal Reserve. If you have any other questions, let me know. LPS5

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