sweetd no one can short OTC's on margin account. No way, zippo, nada, aint-gonna-happen. IF the broker has borrows available on an OTC, you will be using a CASH account + hefty per-share borrow fee, for the privilege ($2.50/share borrow fee as lowtrade explained)
Only MMs can really "short" OTC appreciably, by selling naked and other related shell games- but I'm being very general in this statement and there is a lot more to that- and firmly out of the hands of retail.
anyone retail trying to short OTCs for the win, might as well go take all the cash out of their brokerage account and set it on fire. Same end result. ;-)
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