Question about penny stocks - shorting - weird issue regarding margin

[LS1Z28]

Dude, the 700,000 number is IRRELEVANT. They could do a reverse stock split tomorrow and make that number 7, it still wouldn't make it any riskier. What is relevant is that I only wanted to short $1,050 worth.

https://www.marketwatch.com/story/h...hed-and-now-i-owe-e-trade-10644556-2015-11-19
Check this link out. This story is a good read.

Cheaper stocks have a higher potential of making a parabolic move. I'm not trying to deter you from short selling stocks, just take into consideration the potential risk & reward before entering a position.

 

[Saltynuts]

I follow you LS1Z28. Appreciate it. But I've got a plan. Just going to have to short stocks ABOVE $2.50 apparently.

 

[Sig]

Dude, the 700,000 number is IRRELEVANT. They could do a reverse stock split tomorrow and make that number 7, it still wouldn't make it any riskier. What is relevant is that I only wanted to short $1,050 worth.

I'm with you on the concept that the absolute stock price is essentially irrelevant from a math perspective. However one thing to think about is that if the company knows their current price causes it to be difficult to invest in, short... and can't be bothered to do a reverse split, that says a lot in and of itself. You might also look at what their shares outstanding would be if they did such a reverse split. If they would end up with 5,000 shares outstanding and that's the reason they're not doing it, well that also says a lot about how illiquid and volatile the stock could potentially be. There's a bit more to it than just the math.