short sales, short gainst the box, puts, calls under $5 per share

I am trying to find a brokerage house that will accept my order for a
short sale. short against the box. put or call on stocks trading below
$5 per share. My broker. Scottrade will not take the order. I realize
the next step is for a market maker to accept the order.

Normally $5 is the lowest Strike price so that would make $5 Puts ITM
with no OTM options. There are. a couple of exceptions and I
think they had $2.50 Strikes for them.
Short Against the Box means selling your own stock short. This was
done years ago to lock in the selling price in the current year but
not reported until actually covered. I do believe Congress has killed
that convenient loophole. It makes zero sense today.

The only thing you stated that makes sense. is not allowing shorting of
stock selling at below $5 per share. Most brokers have this
restriction. but not on commonly traded large companies whose shares
have fallen below $5.
Short against the box actually means you have shares of company A in
your safety deposit box (you are long on A). and you go short on A in
your broker acct. If your broker doesn't know you have shares on A in
your box. they won't stop you. You could actually do this. The IRS
would have a problem and your broker might if you told him. Anyway that
is what THAT means.
There is another usage for shorting a stock that you are long on. it's
a bit complicated for me to explain. I've never done it. and I don't
know if Etrade allows it. Too hard to explain here.
Shorting a stock you are long on is legal. so long as you
report it to the IRS properly. Some brokers allow it. Puts and calls on stocks trading below $5 a share. SUNW has listed
options and it's share price is in the 4 dollar range. For that matter.
you MAY be able to short it. Check with your broker. I can in my Etrade
acct. Of course many puts and call options sell for way less than $5
each (for the options themselves). Smallest price I've seen is 15
cents. You buy those by the 100's so an order of 1 at $1 would actually
cost you $100 etc. Pricing options is always a bit difficult. Don't buy
too many by mistake! Of course there are different levels of approval. Usually what allows
you to buy and sell options is level 2. And you need a margin account.
That comes with the higher levels (anything above basic level zero). I
think. Level 3 is for complicated option stuff. like straddles and
strangles.

So why would one want to short sell and not deliever what one has to
do eventually? Almost free is the Collar ( buy Put. sell Call ) to
freeze an asset.

Shorting Against the Box: If you place a short sell for a stock that you
currently have an open long position in. then the trade will be
rejected.
You can't be long and short in the same stock at the same time.
Find me a broker who will let you short against the box anymore. and the NASD getting involved.