Medinah Minerals (MDMN)

[myrtle222]

"Upsides and Downsides to OTC Stocks From Investopedia http://www.investopedia.com


There are upsides to investing in Pink Sheets stocks. One advantage is that some of the quality names like those mentioned above pay dividends and would be very sound investments. Another advantage of Pink Sheets stocks lies in their inexpensive prices. Some shares can be bought for less than $1.


In contrast, there are some downsides. Pink Sheets stocks lack liquidity and are often thinly traded, which can make them volatile. The bid-ask spread is wide, and investors need to be patient and cautious when putting in any buy or sell order. In addition, despite some of the quality companies, many are worthless. Because Pink Sheets is not an exchange, but a quotation service, it is unregulated and can therefore result in scams or other potentially harmful investments. Minimal to no transparency or fundamental information is available for many of the stocks, while some are subject to various schemes. The Pink Sheets also disallows margins and short selling, which can be either a positive or negative depending on the investor's viewpoint. As a result of the aforementioned downsides, investors need to be cautious."

If MDMN short sells why not margins as well ?