Digital Brand Media and Marketing Group Inc (DBMM)

[Chart Reader]

Shorting a $.005 cent stock?

Do you know this fact?

The $2.50 Rule
The $2.50 rule is a rule that affects short sellers. It basically means if you short a stock trading under $1, it doesn’t matter how much each share is — you still have to put up $2.50 per share of buying power.

That can eat up a lot of capital.

I mean, why would a short seller put up $2.50 in buying power to short a 40-cent stock down to what … 20 cents? It doesn’t make sense. And that’s why there are not as many short sellers in true penny stocks.