Suppose you want to clear $1000 by shorting HPNN at $0.0002.
You borrow HPNN shares and sell them at $0.0002 right away, and later cover buy buying back the same number of shares at a lower price, and giving back the borrowed shares. Your profit, if any, is the difference between the initial sell price, and the later covering price, if it's lower. Minus some brokerage fees and maintenance fees.
But, to be allowed to borrow subpenny shares for the purpose of shorting, you have to keep a deposit of $2.50 by share borrowed (shorted) in your trading account.
So, if I want to clear $1000 of gross profit when HPNN falls from $0.0002 to $0.0001, I would need to borrow 10,000,0000 HPNN shares, for which the broker will require a deposit of $25,000,000 ....
Immobilize $25 million quids in the hope of making up a measly $1000 ?
There are better and safer ways to invest you money, assuming you have that $25 millions dollars.
Even when assuming that HPNN will go back to $0.0001 very soon is an extremely safe bet.
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