This is what i read.
A Margin Account is Needed
As mentioned before you need to trade with margin, on the other hand, this is not required when buying shares. Many traders don’t feel comfortable borrowing capital due to the risks involved. Also, more capital is needed to open a margin account instead of a cash account. You are required to put up 50% of the total position size that you want to short, as collateral. (This is known as initial margin). If the stock increases, then your margin levels will fall. If they fall below 30% your broker will issue a margin call. This forces you to deposit more money until your margin level is brought back up to at least 50% or your position will be liquidated immediately. Penny shares can spike 50-100% rapidly due to unforeseen circumstances such as stock promoters sending out an email alert during market hours and you end up losing money purely because of bad luck.