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Can You Make Money Short Selling Penny Stocks?
June 19, 2014 by admin
Can You Short Sell Penny Stocks?
Contrary to what some traders believe, you are allowed to short sell penny stocks. This tends to surprise /confuse people mainly because investopedia.com has stated in the past it was illegal, obviously this has been proven incorrect by Tim Sykes. Learning to short sell makes you a more diverse and flexible trader because you can buy breakouts and short sell when the price drops. So this gives you the unique ability to make profits on the way up and on the way down. Statistically the odds should be in your favor since every penny stock pump and dump will inevitably collapse 90% following the promotion. The hard part is finding shares to short before the stock crashes.
When shorting small cap stocks there is a number of factors that you should take into consideration:
1. Allocating Shares to Short is Becoming Increasingly Difficult
Trying to locate shares to short can be really difficult and time consuming. The margin rate is very high when you try to hold these stocks in the long term. Shorting will require you to open multiple brokerage accounts in order to find the best borrows. There is no single broker that will allow you to short sell every penny stock. If you setup accounts with the top 4 brokers this will allow you to short roughly 80% of your penny stock plays. But remember each broker has different account minimums so short selling is not ideal for people with small account sizes. Some of the best brokers for short selling penny stocks are Interactive Brokers, Speedtrader, TradeStation and Suretrader. Also brokers don’t like the concept of short selling micro caps because it is extremely risky due to potential short squeezes
there u go dumbbaszzzzzz
taken down, lol, shows how desperate and pathetic these wall st crooks are