TheGlobe.com Inc (TGLO)

[mtlebomac]

Shorting...almost any US-brokerage firm will not short an OTC stock. (Fidelity, TDA, eTrade, etc.). IF you can, you'll be subject to the $2.50 margin rule (trading on margin) and you're not going to make much money going that route (see article and math below)

SureTrader and Interactive Brokers, will. That said, here's what Interactive Brokers (IB) is showing re:

Shares available to short for TGLO: 550,000 shares

https://interactivebrokers.com/en/?f=%2Fen%2Ftrading%2FViewShortableStocks.php%3Fcntry%3Dusa%26a



Now back to Shorting an OTC stock...you'd have to have really deep pockets and your returns are really not that fantastic down at these levels.

http://tradetheticker.blogspot.com/2014/02/question-what-is-250-rule.html

The $2.50 rule applies when you are short selling stocks that are priced under $2.50. Basically, the rule states that for every share you are short, you still need to put up $2.50 of capital, even if the stock is priced lower.

Why does this matter? Let's say you have a $1000 account and you want to short sell pennystocks. If the stock is under $2.50, you will not be able to take a full $1000 position, even if you wanted to. Here's the math:

You have a $1000 account;

For ANY stock under $2.50, you must still put up $2.50 in capital.

Divide $1000 by $2.50, and the MOST shares you can short is 400 shares, REGARDLESS of price.

This can be a huge frustration for small accounts. You might have the perfect supernova chart and the stock is trading at $1, but you can't short 1000 shares. You can only short 400 because of the $2.50 rule.

Here are a few examples of the MOST shares you can short based on your account value:

$1000 account - 400 shares max
$2500 account - 1000 shares max
$5000 account - 2000 shares max
$10,000 account - 4000 shares max
$25,000 account - 10,000 shares max

The cheaper the stock, the larger a disadvantage this is because of the smaller $ position size you will ultimately wind up taking. Unfortunately, it's one of the realities of short selling but as your account grows, it will become less of a nuisance. I hope this helps clear up any confusion!