Short selling on the OTC barely exists, because of the large margin account requirements. $2.50 for each share shorted in pennyland, in your margin account. Think of that; to short a .001 stock for 1 mil shares or $1k worth, you would need a margin account value of $2.5 mil.
Naked shorting has become the exception rather then the rule. It still happens in fast and furious runs. But now days, not as large as before, so it can be cleaned up quickly. I can remember per 2007 the SHO list having 25 naked short stocks over 90 days, up to 300 days, with out cover yet. And 200 company stocks on the list in general. Now days it has less then 25 generally, with rarely any over 90 days on the list.
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