Monday, September 07, 2020 4:59:40 PM
Most brokerage firms will not allow you to short stocks under $5 dollars, because they fully understand the risk involved. However, there are a few brokerage firms that will allow you to do so.
The reason you should not short stocks under $5 dollars is very simple. In the event that you are wrong and you somehow select that high flyer accidentally, you could be wiped out. What I mean by this is since these stocks often move sharply in one direction, you could face a number of gap up days that could completely erase your account balance and have you owing money to your brokerage firm.
While the odds of this happening are slim, this is something you can not afford to happen even once. So, let’s take a look at another real-world example of when a penny stock can start taking off.
This ia info from the stock PLUG. PLUG hit a yearly low of .12 cents in February 2013 and then had a number of rallies and pullbacks until it finally started to quiet down at the .70 cent range. Now at the time PLUG could have given you the impression that it was topping out for the third time around the .70 cent region and was set for a pullback. Assuming you could actually find a brokerage firm or prop firm that would allow you to short PLUG, you literally could have been wiped out in a matter of 2 days as the stock ran from .80 cents over a $1.60.
Really High Maintenance Requirements
Beyond the real possibility you will be unable to short stocks under 5 dollars, there are really high margin maintenance requirements for holding high-risk stocks. For those of you unfamiliar with maintenance requirements, your brokerage firm assesses the volatility and perceived risk of a security and places a requirement of the amount of cash you are required to maintain in your account at all times. If you dip below this cash requirement, your brokerage firm is within their right to liquidate your position at market.
These margin requirements can range from 50% all the way up to 100%. This means that if you use margin your borrowing power is reduced significantly. Which begs the question, if you feel there is more money in trading the cheap stocks, yet you can’t use all of your available trading funds, what is the point?
Recent TTNP News
- Form SC 13D/A - General Statement of Acquisition of Beneficial Ownership: [Amend] • Edgar (US Regulatory) • 08/21/2024 12:32:38 PM
- Form 425 - Prospectuses and communications, business combinations • Edgar (US Regulatory) • 08/19/2024 08:23:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/19/2024 08:22:56 PM
- Titan Pharmaceuticals Enters Into Merger Agreement With KE Sdn. Bhd. • GlobeNewswire Inc. • 08/19/2024 08:11:12 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/15/2024 01:29:55 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 08/15/2024 01:29:10 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/25/2024 09:33:11 PM
- Titan Pharmaceuticals Fully Compliant With NASDAQ Listing Criteria • GlobeNewswire Inc. • 01/25/2024 09:29:23 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/18/2024 09:59:05 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/08/2024 10:13:45 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/28/2023 09:30:20 PM
- Titan Pharmaceuticals Announces Reverse Stock Split and Ratio • GlobeNewswire Inc. • 12/28/2023 09:15:00 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 11/28/2023 09:47:46 PM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 11/17/2023 09:03:19 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/15/2023 09:05:15 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/26/2023 08:33:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/26/2023 08:31:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/26/2023 08:29:31 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/26/2023 08:25:57 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/26/2023 08:23:37 PM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 10/24/2023 09:26:34 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 10/23/2023 07:07:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/16/2023 09:08:35 PM
- Titan Pharmaceuticals Announces Appointment of Dato' Seow Gim Shen and Brynner Chaim to the Company's Board of Directors • GlobeNewswire Inc. • 10/16/2023 08:37:23 PM
- Form SC 13D - General statement of acquisition of beneficial ownership • Edgar (US Regulatory) • 10/04/2023 09:30:18 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM