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Of course you can, although probably not best option right now.

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hmmm... I'll clarify... In the US, most individual investors/traders cannot initiate an open short stock position for a stock priced under $5. (You can hold a short that you previously opened when it was above $5, market makers play by different rules, and foreign exchanges have different rules.) You can also buy Put options on stocks below $5.

For more info on shorting:
http://www.daytraders.com/short_selling.html

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Many direct access brokers will allow you to short under $5.