A broker from eTrade told me I cannot short a stock when the price is under 3 dollars. He said it was an SEC rule. Is this true? or just some B.S. the etrade guy gave me because he had no reason as to why my order was not being filled. Any thoughts??
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SEC Rule can't short stock under 3$??
- Thread starter nwtrader245
- Start date
he's a moron.
the restrictions on shorting a stock are:
-> are the shares borrowable? (see regulation SHO list)
-> does your broker's clearing house have shares / want to assume risk?
-> does your broker want to assume risk?
some brokers don't allow shorting under $5 stocks. penson (clearing house) generally doesn't allow under $5 on smaller cap stocks (huge stocks are ok, i believe).
you have to do some research, but there's a bunch of brokers who allow shorting under $5 stocks.
(edit: some brokerages put additional margin requirements for under $5 stocks; for example, they may require you to put $5 of margin up for each share you short, even if the stock itself is at $1).
the restrictions on shorting a stock are:
-> are the shares borrowable? (see regulation SHO list)
-> does your broker's clearing house have shares / want to assume risk?
-> does your broker want to assume risk?
some brokers don't allow shorting under $5 stocks. penson (clearing house) generally doesn't allow under $5 on smaller cap stocks (huge stocks are ok, i believe).
you have to do some research, but there's a bunch of brokers who allow shorting under $5 stocks.
(edit: some brokerages put additional margin requirements for under $5 stocks; for example, they may require you to put $5 of margin up for each share you short, even if the stock itself is at $1).
Quote from HighImTom:
A broker from eTrade told me I cannot short a stock when the price is under 3 dollars. He said it was an SEC rule. Is this true? or just some B.S. the etrade guy gave me because he had no reason as to why my order was not being filled. Any thoughts??
tell him he is a moron and ask to speak to someone superior to him.