In order to short penny stocks most brokers requir
Post# of 11038
Posted On: 09/24/2015 8:59:37 PM
In order to short penny stocks most brokers require $2.50 per share to cover the account. There are offshore brokers who don't have that kind of requirement though.
http://budgeting.thenest.com/options-shortsel...28888.html
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Understanding Margin Requirements
Shorting stocks is done on margin, and for penny stocks, the margin requirements are steep. Many of the firms have a 100 percent requirement, which means you can't short without a large cushion of capital without risking a margin call. If a margin calls occurs and there is not enough money in your account to cover your position, the brokerage will require you to deposit more money. If you cannot deposit more money, positions in your account will be closed till the margin call is met. You have no choice in what positions are closed. With the volatility of penny stocks, a margin call is a serious possibility if you're trading a large percentage of your account. Interactive Brokers has a percentage requirement or $2.50 per share , whichever is more. If you're shorting stocks that are around $1, you're paying more in fees than you would be for the position. Before you open an account at any brokerage, evaluate its fee structures.
http://budgeting.thenest.com/options-shortsel...28888.html
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