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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?


To: Bob Cook who wrote (988)4/7/1998 11:25:00 AM
From: Carl Yee  Read Replies (1) | Respond to of 2506
 
I think what you heard was that stocks under $5 are not marginable for shorting. You can still short them, but that means if you short them, you have to have cash to back up your decrease in equity.



To: Bob Cook who wrote (988)4/7/1998 11:33:00 AM
From: dumbmoney  Respond to of 2506
 
I've got a question about shorting stocks. I read somewhere that you can not short a stock after it gets down to $5. Is that true? If so, is this a SEC rule?

Most brokers do not allow shorting stock below $5, but some (e.g. Schwab) do - provided that shares can be borrowed.