SHORT SELLING!?!
Based on the search results, there is no specific prohibition on short selling stocks under $3. Short selling is a legal trading strategy in most jurisdictions, including the United States, as long as it complies with regulations.
Rule 10a-1
In the United States, Rule 10a-1 prohibits short selling on upticks, which means that short sales can only be executed when the last traded price is lower than the previous trade. This rule aims to slow down the momentum of a security’s decline and prevent artificial price suppression.
Naked Short Selling
Naked short selling, which involves selling a security without borrowing it first, is not prohibited per se. However, abusive naked short selling practices have been banned in some jurisdictions, including the United States, to prevent market manipulation.
No Special Treatment for Stocks under $3
There is no evidence to suggest that short selling is prohibited or restricted specifically for stocks trading under $3. Short sellers can still engage in short selling strategies for these stocks as long as they comply with applicable regulations, such as Rule 10a-1 and other SEC regulations.
In summary, shorting stocks under $3 is not prohibited, and short sellers can engage in this strategy as long as they comply with relevant regulations.