Short Selling Penny Stocks

[mage lang="" source="flickr"]short selling penny stocks[/mage]
is this right that “a stock with less than $5 share is non-marginable so you can not short sell it”?

I want to short sell penny stocks and as you know most of them are below $5 a share, I asked a friend of mine about this and he said ”a stock with less than $5 share is non-marginable so you can not short sell it”?
I just want to make sure that it’s right!
isn’t dependent on the broker’s policy? I mean is it something by law or it depends on brokerage firm?

“”is this right that “a stock with less than $5 share is non-marginable so you can not short sell it”"”
No this entire statement is not correct as stated

A stock selling less than $5 is not marginable per Federal Law. This is so since the Federal Reserve has declared that such a stock has no loan value.

Yes you can sell a stock selling below $5 short only if the brokerage firm gives their prior approval before you enter the order. Usually it is dependent on whether the firm can borrow the stock in order to make delivery to the buyer.
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Short Sell a stock


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