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Wednesday, February 25, 2015 6:28:19 AM
Here a little write-up:
Brokers require investors to put up collateral to guarantee against potential losses in the form of margin requirements. Often times, brokers will require OTC investors to have $2.50 of margin per share to short a stock under $2.50, which can make shorting penny stocks very costly. For example, if an investor shorted 2,000 shares of a stock at $0.50, you have to have $5,000 in your account. All along, the maximum profit for this position would only be $1,000, if the stock went to zero.
http://theotcinvestor.com/how-to-short-sell-penny-stocks-121/
You can check out Brokers like SureTrader, Interactive Brokers, SpeedTrader and whatever you want they all have similar requirements.
Here SureTrader:
Shorting stocks below $2.50 require a $2.50 per share equity requirement.
For example: If you short 1,000 shares of stock valued at $1.00 per share, you will need at least $2,500 equity in your account.
http://suretrader.com/trading-fees/margin-fees/
With these costs and Terms in mind you'd need a massive Account in order to short a sub-penny and actually make some $!
In order to short 1M shares here you'd need to have at least $2.5M Equity in your Account.
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