Jim, in the US, as a general rule, you can short only marginable stocks (well, unless you want to deposit a security in the full face amount), thus most brokerage house don't let you short stock under $5, since, as a general rule, these are not marginable. But, there is ample evidence that shorting of penny stock occur all the time, either the shorters have iron clad collateral (like floorless converts), or they do it from over seas accounts. I am not familiar with any US broker that will let you short stock under $5 without it hitting your account (for collateral) with the full shorting amount. I hope this helps.
Zeev |
