Q: Can you short any stock, or just some stocks?
--Andrea Leverentz, Chicago
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A: To be shorted, a stock needs to qualify as "marginable." That means investors can purchase shares with funds borrowed from their brokerages. Most stocks on the New York Stock Exchange are marginable and many Nasdaq stocks also qualify, while stocks trading for less than $5 per share often do not.
For those who might have forgotten, shorting stocks involves reversing the usual order of investing. If you've heard about a books-on-tape retail chain called Tapeworm and you think its stock price is due to tumble, you might profit off its decline by shorting it.
You'd place an order to short-sell the stock through your broker, and the broker would borrow someone else's shares and sell them for you. What you're betting is that the stock will sink so you can replace the borrowed shares with shares purchased at a lower price.