How difficult it is to sell short OTC stocks in the last several years? First, no "hedge fund" nor any offshore brokerage can "naked short" anything - they can only sell short through a US market maker and they are required to put up $2.50 in margin for each share of an OTC stock they wish to sell short - and the shares must be available for borrow, as they must be delivered on day T+3.
So the idea that some "hedge funds" are now short-selling any significant amount of a OTC stock is pretty ridiculous. Do the math with a $2.50 cash margin deposit to sell short a $0.01 stock.
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