Ultimately, it's up to your brokerage to decide which stocks are available to short-sellers on any given trading day, but penny stocks may be harder to short. Penny stocks are typically less liquid than major stocks like Apple or Home Depot. Since the stocks are more thinly traded, there are fewer traders available to loan shares to short-sellers. This is especially true for penny stocks traded over the counter. Your brokerage may charge extra fees for shorting these hard-to-borrow stocks, or it may not have any shortable shares available at all.