Thursday, September 08, 2022 10:40:07 AM
The margin requirements for shorting penny stocks are far too onerous for all but some hedge fund types to actually short the pink sheets.
Most retail brokerages won't even let you short OTC stocks.
Here's an example of what I am saying:
"For short positions, the maintenance requirement on stock greater than $5, is $5 per share or 30% of the stock value, whichever is greater. For short positions in stock where the last sale price/share is less than $5, then the maintenance margin requirement is $2.50 per share or 100% of the stock value, whichever is greater."
https://ibkr.info/article/285
So for every $0.0008 share you want to short, you must have $2.50 in your account. Do the math and it becomes obvious that shorting BIEL is not a thing.
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