I think the catch is that at one time years ago you couldn't short stocks under five bucks. Back when I started trading pennies everyone would say that the only ones who could short them were through a Canadian brokerage. But from what I understand it is different now. I don't think you can short penny stocks with the main brokers like Etrade, Ameritrade, etc. but there a few out there that let you short pennies. I have never ever done it so I don't know much about it.
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