Contrary to what some people believe, yes you are able to short sell penny stocks but there are restrictions. This tends to surprise people because investopedia.com stated in the past it was illegal. Obviously, this has been proven false by infamous short seller Tim Sykes, who has made millions exploiting this strategy. Learning how shorting works makes you a more diverse trader because you can make money in any market environment. By shorting small caps, statistically the odds are in your favor since every pump and dump will inevitably drop 90% after the promotion ends. The hardest part is waiting for the price to collapse and locating shares to borrow. https://pennystockwhizzkid.com/can-you-make-money-short-selling-penny-stocks/. Lol look at that CYNK is an example of a crazy short squeeze in action. Back in 2014, CYNK Technology Corp, a worthless “social media” company surged from 0.06 to $22 (36,000% gain) before being halted by the SEC. At one point this one man run business had an insane market cap of $6 billion when it was really worth $50. In hindsight, the accident was caused by a hedge fund trader.