Short (finance)

In finance, being short in an asset means investing in

such a way that the investor will profit if the value of
the asset falls. This is the opposite of a more
conventional "long" position, where the investor will
profit if the value of the asset rises.

There are a number of ways of achieving a short

position. The most fundamental method is "physical"
selling short or short-selling, which involves
borrowing assets (often securities such as shares or
bonds) and selling them. The investor will later
purchase the same number of the same type of securities
Schematic representation of physical short
in order to return them to the lender. If the price has selling in two steps. The short seller borrows
fallen in the meantime, the investor will have made a shares and immediately sells them. The short
profit equal to the difference. Conversely, if the price seller then expects the price to decrease, after
has risen then the investor will bear a loss. The short which the seller can profit by purchasing the
seller must usually pay a fee to borrow the securities shares to return to the lender.
(charged at a particular rate over time, similar to an
interest payment), and reimburse the lender for any cash
returns such as dividends that were due during the period of lease.

Short positions can also be achieved through futures, forwards or options, where the investor can assume
an obligation or a right to sell an asset at a future date at a price that is fixed at the time the contract is
created. If the price of the asset falls below the agreed price, then the asset can be bought at the lower price
before immediately being sold at the higher price specified in the forward or option contract. A short
position can also be achieved through certain types of swap, such as contracts for differences. These are
agreements between two parties to pay each other the difference if the price of an asset rises or falls, under
which the party that will benefit if the price falls will have a short position.

Because a short seller can incur a liability to the lender if the price rises, and because a short sale is
normally done through a broker, a short seller is typically required to post margin to its broker as collateral
to ensure that any such liabilities can be met, and to post additional margin if losses begin to accrue. For
analogous reasons, short positions in derivatives also usually involve the posting of margin with the
counterparty. Any failure to post margin promptly would prompt the broker or counterparty to close the
position.

Short selling is an especially systematic and common practice in public securities, futures or currency
markets that are fungible and reasonably liquid.

A short sale may have a variety of objectives. Speculators may sell short hoping to realize a profit on an
instrument that appears overvalued, just as long investors or speculators hope to profit from a rise in the
price of an instrument that appears undervalued. Alternatively, traders or fund managers may use offsetting
short positions to hedge certain risks that exist in a long position or a portfolio.
Research indicates that banning short selling is ineffective and has negative effects on markets.[1][2][3][4][5]
Nevertheless, short selling is subject to criticism and periodically faces hostility from society and
policymakers.[6]

Concept

Physical shorting with borrowed securities

To profit from a decrease in the price of a security, a short seller can borrow the security and sell it,
expecting that it will be cheaper to repurchase in the future. When the seller decides that the time is right (or
when the lender recalls the securities), the seller buys the same number of equivalent securities and returns
them to the lender. The act of buying back the securities that were sold short is called covering the short,
covering the position or simply covering. A short position can be covered at any time before the securities
are due to be returned. Once the position is covered, the short seller is not affected by subsequent rises or
falls in the price of the securities, for it already holds the securities that it will return to the lender.

The process relies on the fact that the securities (or the other assets being sold short) are fungible. An
investor therefore "borrows" securities in the same sense as one borrows cash, where the borrowed cash
can be freely disposed of and different bank notes or coins can be returned to the lender. This can be
contrasted with the sense in which one borrows a bicycle, where the same bicycle must be returned, not
merely one that is the same model.

Because the price of a share is theoretically unlimited, the potential losses of a short-seller are also
theoretically unlimited.

Worked example of a profitable short sale

Shares in ACME Inc. currently trade at $10 per share.

1. A short seller borrows from a lender 100 shares of ACME Inc., and immediately sells them
for a total of $1,000.
2. Subsequently, the price of the shares falls to $8 per share.
3. Short seller now buys 100 shares of ACME Inc. for $800.
4. Short seller returns the shares to the lender, who must accept the return of the same number
of shares as was lent despite the fact that the market value of the shares has decreased.
5. Short seller keeps as its profit the $200 difference between the price at which the short seller
sold the borrowed shares and the lower price at which the short seller purchased the
equivalent shares (minus borrowing fees paid to the lender).

Worked example of a loss-making short sale

Shares in ACME Inc. currently trade at $10 per share.

1. A short seller borrows 100 shares of ACME Inc., and sells them for a total of $1,000.
2. Subsequently, the price of the shares rises to $25 per share.
3. Short seller is required to return the shares, and is compelled to buy 100 shares of ACME
Inc. for $2,500.
4. Short seller returns the shares to the lender, who accepts the return of the same number of
shares as was lent.
 5. Short seller incurs as a loss the $1,500 difference between the price at which he sold the
borrowed shares and the higher price at which the short seller had to purchase the
equivalent shares (plus any borrowing fees).

Synthetic shorting with derivatives

"Shorting" or "going short" (and sometimes also "short selling") also refer more broadly to any transaction
used by an investor to profit from the decline in price of a borrowed asset or financial instrument.
Derivatives contracts that can be used in this way include futures, options, and swaps.[7][8] These contracts
are typically cash-settled, meaning that no buying or selling of the asset in question is actually involved in
the contract, although typically one side of the contract will be a broker that will effect a back-to-back sale
of the asset in question in order to hedge their position.

History
The practice of short selling was likely invented in 1609 by Dutch businessman Isaac Le Maire, a sizeable
shareholder of the Dutch East India Company (Vereenigde Oostindische Compagnie or VOC in Dutch).[9]
Short selling can exert downward pressure on the underlying stock, driving down the price of shares of that
security. This, combined with the seemingly complex and hard-to-follow tactics of the practice, has made
short selling a historical target for criticism.[10] At various times in history, governments have restricted or
banned short selling.

The London banking house of Neal, James, Fordyce and Down collapsed in June 1772, precipitating a
major crisis that included the collapse of almost every private bank in Scotland, and a liquidity crisis in the
two major banking centres of the world, London and Amsterdam. The bank had been speculating by
shorting East India Company stock on a massive scale, and apparently using customer deposits to cover
losses. It was perceived as having a magnifying effect in the violent downturn in the Dutch tulip market in
the eighteenth century. In another well-referenced example, George Soros became notorious for "breaking
the Bank of England" on Black Wednesday of 1992, when he sold short more than $10 billion worth of
pounds sterling.

The term short was in use from at least the mid-nineteenth century. It is commonly understood that the
word "short" (i.e. 'lacking') is used because the short seller is in a deficit position with his brokerage house.
Jacob Little, known as The Great Bear of Wall Street, began shorting stocks in the United States in
1822.[11]

Short sellers were blamed for the Wall Street Crash of 1929.[12] Regulations governing short selling were
implemented in the United States in 1929 and in 1940. Political fallout from the 1929 crash led Congress to
enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule
and was in effect until 3 July 2007, when it was removed by the Securities and Exchange Commission
(SEC Release No. 34-55970).[13] President Herbert Hoover condemned short sellers and even J. Edgar
Hoover said he would investigate short sellers for their role in prolonging the Depression. A few years later,
in 1949, Alfred Winslow Jones founded a fund (that was unregulated) that bought stocks while selling other
stocks short, hence hedging some of the market risk, and the hedge fund was born.[14]

Negative news, such as litigation against a company, may also entice professional traders to sell the stock
short in hope of the stock price going down.
During the dot-com bubble, shorting a start-up company could backfire since it could be taken over at a
price higher than the price at which speculators shorted; short-sellers were forced to cover their positions at
acquisition prices, while in many cases the firm often overpaid for the start-up.

Naked short selling restrictions

During the 2008 financial crisis, critics argued that investors taking large short positions in struggling
financial firms like Lehman Brothers, HBOS and Morgan Stanley created instability in the stock market
and placed additional downward pressure on prices. In response, a number of countries introduced
restrictive regulations on short-selling in 2008 and 2009. Naked short selling is the practice of short-selling
a tradable asset without first borrowing the security or ensuring that the security can be borrowed – it was
this practice that was commonly restricted.[15][16] Investors argued that it was the weakness of financial
institutions, not short-selling, that drove stocks to fall.[17] In September 2008, the Securities Exchange
Commission in the United States abruptly banned short sales, primarily in financial stocks, to protect
companies under siege in the stock market. That ban expired several weeks later as regulators determined
the ban was not stabilizing the price of stocks.[16][17]

Temporary short-selling bans were also introduced in the United Kingdom, Germany, France, Italy and
other European countries in 2008 to minimal effect.[18] Australia moved to ban naked short selling entirely
in September 2008.[15] Germany placed a ban on naked short selling of certain euro zone securities in
2010.[19] Spain, Portugal and Italy introduced short selling bans in 2011 and again in 2012.[20]

During the COVID-19 pandemic, shorting was severely restricted or temporarily banned, with European
market watchdogs tightening the rules on short selling "in an effort to stem the historic losses arising from
the coronavirus pandemic".[21][22]

Worldwide, economic regulators seem inclined to restrict short selling to decrease potential downward price
cascades. Investors continue to argue this only contributes to market inefficiency.[15]

Mechanism
A short seller typically borrows through a broker, who is usually holding the securities for another investor
who owns the securities; the broker himself seldom purchases the securities to lend to the short seller.[23]
The lender does not lose the right to sell the securities while they have been lent, as the broker usually holds
a large pool of such securities for a number of investors which, as such securities are fungible, can instead
be transferred to any buyer. In most market conditions there is a ready supply of securities to be borrowed,
held by pension funds, mutual funds and other investors.

Shorting stock in the U.S.

To sell stocks short in the U.S., the seller must arrange for a broker-dealer to confirm that it can deliver the
shorted securities. This is referred to as a locate. Brokers have a variety of means to borrow stocks to
facilitate locates and make good on delivery of the shorted security.

The vast majority of stocks borrowed by U.S. brokers come from loans made by the leading custody banks
and fund management companies (see list below). Institutions often lend out their shares to earn extra
money on their investments. These institutional loans are usually arranged by the custodian who holds the
securities for the institution. In an institutional stock loan, the borrower puts up cash collateral, typically
102% of the value of the stock. The cash collateral is then invested by the lender, who often rebates part of
the interest to the borrower. The interest that is kept by the lender is the compensation to the lender for the
stock loan.

Brokerage firms can also borrow stocks from the accounts of their own customers. Typical margin account
agreements give brokerage firms the right to borrow customer shares without notifying the customer. In
general, brokerage accounts are only allowed to lend shares from accounts for which customers have debit
balances, meaning they have borrowed from the account. SEC Rule 15c3-3 imposes such severe
restrictions on the lending of shares from cash accounts or excess margin (fully paid for) shares from
margin accounts that most brokerage firms do not bother except in rare circumstances. (These restrictions
include that the broker must have the express permission of the customer and provide collateral or a letter of
credit.)

Most brokers allow retail customers to borrow shares to short a stock only if one of their own customers has
purchased the stock on margin. Brokers go through the "locate" process outside their own firm to obtain
borrowed shares from other brokers only for their large institutional customers.

Stock exchanges such as the NYSE or the NASDAQ typically report the "short interest" of a stock, which
gives the number of shares that have been legally sold short as a percent of the total float. Alternatively,
these can also be expressed as the short interest ratio, which is the number of shares legally sold short as a
multiple of the average daily volume. These can be useful tools to spot trends in stock price movements but
for them to be reliable, investors must also ascertain the number of shares brought into existence by naked
shorters. Speculators are cautioned to remember that for every share that has been shorted (owned by a new
owner), a 'shadow owner' exists (i.e., the original owner) who also is part of the universe of owners of that
stock, i.e., despite having no voting rights, he has not relinquished his interest and some rights in that stock.

Securities lending

When a security is sold, the seller is contractually obliged to deliver it to the buyer. If a seller sells a security
short without owning it first, the seller must borrow the security from a third party to fulfill its obligation.
Otherwise, the seller fails to deliver, the transaction does not settle, and the seller may be subject to a claim
from its counterparty. Certain large holders of securities, such as a custodian or investment management
firm, often lend out these securities to gain extra income, a process known as securities lending. The lender
receives a fee for this service. Similarly, retail investors can sometimes make an extra fee when their broker
wants to borrow their securities. This is only possible when the investor has full title of the security, so it
cannot be used as collateral for margin buying.

Sources of short interest data

Time delayed short interest data (for legally shorted shares) is available in a number of countries, including
the US, the UK, Hong Kong, and Spain. The number of stocks being shorted on a global basis has
increased in recent years for various structural reasons (e.g., the growth of 130/30 type strategies, short or
bear ETFs). The data is typically delayed; for example, the NASDAQ requires its broker-dealer member
firms to report data on the 15th of each month, and then publishes a compilation eight days later.[24]
Some market data providers (like Data Explorers and SunGard Financial Systems[25]) believe that stock
lending data provides a good proxy for short interest levels (excluding any naked short interest). SunGard
provides daily data on short interest by tracking the proxy variables based on borrowing and lending data it
collects.[26]

Short selling terms

Days to Cover (DTC) is the relationship between the number of shares in a given equity that has been
legally short-sold and the number of days of typical trading that it would require to 'cover' all legal short
positions outstanding. For example, if there are ten million shares of XYZ Inc. that are currently legally
short-sold and the average daily volume of XYZ shares traded each day is one million, it would require ten
days of average trading for all legal short positions to be covered (10 million / 1 million).

Short Interest relates the number of shares in a given equity that have been legally shorted divided by the
total shares outstanding for the company, usually expressed as a percent. For example, if there are ten
million shares of XYZ Inc. that are currently legally short-sold, and the total number of shares issued by the
company is one hundred million, the Short Interest is 10% (10 million / 100 million). If, however, shares are
being created through naked short selling, "fails" data must be accessed to assess accurately the true level of
short interest.

Borrow cost is the fee paid to a securities lender for borrowing the stock or other security. The cost of
borrowing the stock is usually negligible compared to fees paid and interest accrued on the margin account
– in 2002, 91% of stocks could be shorted for less than a 1% fee per annum, generally lower than interest
rates earned on the margin account. However, certain stocks become "hard to borrow" as stockholders
willing to lend their stock become more difficult to locate. The cost of borrowing these stocks can become
significant – in February 2001, the cost to borrow (short) Krispy Kreme stock reached an annualized 55%,
indicating that a short seller would need to pay the lender more than half the price of the stock over the
course of the year, essentially as interest for borrowing a stock in limited supply.[27] This has important
implications for derivatives pricing and strategy, for the borrow cost itself can become a significant
convenience yield for holding the stock (similar to additional dividend) – for instance, put–call parity
relationships are broken and the early exercise feature of American call options on non-dividend paying
stocks can become rational to exercise early, which otherwise would not be economical.[28]

Major lenders
State Street Corporation (Boston, United States)
Merrill Lynch (New Jersey, United States)
JP Morgan Chase (New York, United States)
Northern Trust (Chicago, United States)
Fortis (Amsterdam, Netherlands, now defunct)
ABN AMRO (Amsterdam, Netherlands, formerly Fortis)
Citibank (New York, United States)
Bank of New York Mellon Corporation (New York, United States)
UBS AG (Zurich, Switzerland)
Barclays (London, United Kingdom)

Naked short selling

A naked short sale occurs when a security is sold short without borrowing the security within a set time (for
example, three days in the US.) This means that the buyer of such a short is buying the short-seller's
promise to deliver a share, rather than buying the share itself. The short-seller's promise is known as a
hypothecated share.

When the holder of the underlying stock receives a dividend, the holder of the hypothecated share would
receive an equal dividend from the short seller.

Naked shorting has been made illegal except where allowed under limited circumstances by market makers.
It is detected by the Depository Trust & Clearing Corporation (in the US) as a "failure to deliver" or simply
"fail." While many fails are settled in a short time, some have been allowed to linger in the system.

In the US, arranging to borrow a security before a short sale is called a locate. In 2005, to prevent
widespread failure to deliver securities, the U.S. Securities and Exchange Commission (SEC) put in place
Regulation SHO, intended to prevent speculators from selling some stocks short before doing a locate.
More stringent rules were put in place in September 2008, ostensibly to prevent the practice from
exacerbating market declines. These rules were made permanent in 2009.

Fees
When a broker facilitates the delivery of a client's short sale, the client is charged a fee for this service,
usually a standard commission similar to that of purchasing a similar security.

If the short position begins to move against the holder of the short position (i.e., the price of the security
begins to rise), money is removed from the holder's cash balance and moved to their margin balance. If
short shares continue to rise in price, and the holder does not have sufficient funds in the cash account to
cover the position, the holder begins to borrow on margin for this purpose, thereby accruing margin interest
charges. These are computed and charged just as for any other margin debit. Therefore, only margin
accounts can be used to open a short position.

When a security's ex-dividend date passes, the dividend is deducted from the shortholder's account and paid
to the person from whom the stock is borrowed.

For some brokers, the short seller may not earn interest on the proceeds of the short sale or use it to reduce
outstanding margin debt. These brokers may not pass this benefit on to the retail client unless the client is
very large. The interest is often split with the lender of the security.

Dividends and voting rights

Where shares have been shorted and the company that issues the shares distributes a dividend, the question
arises as to who receives the dividend. The new buyer of the shares, who is the holder of record and holds
the shares outright, receives the dividend from the company. However, the lender, who may hold its shares
in a margin account with a prime broker and is unlikely to be aware that these particular shares are being
lent out for shorting, also expects to receive a dividend. The short seller therefore pays the lender an amount
equal to the dividend to compensate—though technically, as this payment does not come from the
company, it is not a dividend. The short seller is therefore said to be short the dividend.

A similar issue comes up with the voting rights attached to the shorted shares. Unlike a dividend, voting
rights cannot legally be synthesized and so the buyer of the shorted share, as the holder of record, controls
the voting rights. The owner of a margin account from which the shares were lent agreed in advance to
relinquish voting rights to shares during the period of any short sale.
As noted earlier, victims of naked shorting sometimes report that the number of votes cast is greater than the
number of shares issued by the company.[29]

Markets
Transactions in financial derivatives such as options and futures have the same name but have different
overlaps, one notable overlap is having an equal "negative" amount in the position. However, the practice
of a short position in derivatives is completely different. Derivatives are contracts between two parties, a
buyer and seller. Each trade results in a "long" (buyer's position) and a "short" (seller's position).

Futures and options contracts

When trading futures contracts, being 'short' means having the legal obligation to deliver something at the
expiration of the contract, although the holder of the short position may alternately buy back the contract
prior to expiration instead of making delivery. Short futures transactions are often used by producers of a
commodity to fix the future price of goods they have not yet produced. Shorting a futures contract is
sometimes also used by those holding the underlying asset (i.e. those with a long position) as a temporary
hedge against price declines. Shorting futures may also be used for speculative trades, in which case the
investor is looking to profit from any decline in the price of the futures contract prior to expiration.

An investor can also purchase a put option, giving that investor the right (but not the obligation) to sell the
underlying asset (such as shares of stock) at a fixed price. In the event of a market decline, the option holder
may exercise these put options, obliging the counterparty to buy the underlying asset at the agreed upon (or
"strike") price, which would then be higher than the current quoted spot price of the asset.

Currency

Selling short on the currency markets is different from selling short on the stock markets. Currencies are
traded in pairs, each currency being priced in terms of another. In this way, selling short on the currency
markets is identical to going long on stocks.

Novice traders or stock traders can be confused by the failure to recognize and understand this point: a
contract is always long in terms of one medium and short another.

When the exchange rate has changed, the trader buys the first currency again; this time he gets more of it,
and pays back the loan. Since he got more money than he had borrowed initially, he makes money. The
reverse can also occur.

An example of this is as follows: Let us say a trader wants to trade with the US dollar and the Indian rupee
currencies. Assume that the current market rate is US$1 to Rs. 50 and the trader borrows Rs. 100. With this,
he buys US$2. If the next day, the conversion rate becomes US$1 to Rs. 51, then the trader sells his US$2
and gets Rs. 102. He returns Rs. 100 and keeps the Rs. 2 profit (minus fees).

One may also take a short position in a currency using futures or options; the preceding method is used to
bet on the spot price, which is more directly analogous to selling a stock short.

Risks
Note: this section does not apply to currency markets.
Short selling is sometimes referred to as a "negative income investment strategy" because there is no
potential for dividend income or interest income. Stock is held only long enough to be sold pursuant to the
contract, and one's return is therefore limited to short term capital gains, which are taxed as ordinary
income. For this reason, buying shares (called "going long") has a very different risk profile from selling
short. Furthermore, a "long's" losses are limited because the price can only go down to zero, but gains are
not, as there is no limit, in theory, on how high the price can go. On the other hand, the short seller's
possible gains are limited to the original price of the stock, which can only go down to zero, whereas the
loss potential, again in theory, has no limit. For this reason, short selling probably is most often used as a
hedge strategy to manage the risks of long investments.

Many short sellers place a stop order with their stockbroker after selling a stock short—an order to the
brokerage to cover the position if the price of the stock should rise to a certain level. This is to limit the loss
and avoid the problem of unlimited liability described above. In some cases, if the stock's price skyrockets,
the stockbroker may decide to cover the short seller's position immediately and without his consent to
guarantee that the short seller can make good on his debt of shares.

Short sellers must be aware of the potential for a short squeeze. When the price of a stock rises significantly,
some people who are shorting the stock cover their positions to limit their losses (this may occur in an
automated way if the short sellers had stop-loss orders in place with their brokers); others may be forced to
close their position to meet a margin call; others may be forced to cover, subject to the terms under which
they borrowed the stock, if the person who lent the stock wishes to sell and take a profit. Since covering
their positions involves buying shares, the short squeeze causes an ever further rise in the stock's price,
which in turn may trigger additional covering. Because of this, most short sellers restrict their activities to
heavily traded stocks, and they keep an eye on the "short interest" levels of their short investments. Short
interest is defined as the total number of shares that have been legally sold short, but not covered. A short
squeeze can be deliberately induced. This can happen when large investors (such as companies or wealthy
individuals) notice significant short positions, and buy many shares, with the intent of selling the position at
a profit to the short sellers, who may be panicked by the initial uptick or who are forced to cover their short
positions to avoid margin calls.

Another risk is that a given stock may become "hard to borrow". As defined by the SEC and based on lack
of availability, a broker may charge a hard to borrow fee daily, without notice, for any day that the SEC
declares a share is hard to borrow. Additionally, a broker may be required to cover a short seller's position at
any time ("buy in"). The short seller receives a warning from the broker that he is "failing to deliver" stock,
which leads to the buy-in.[30]

Because short sellers must eventually deliver the shorted securities to their broker, and need money to buy
them, there is a credit risk for the broker. The penalties for failure to deliver on a short selling contract
inspired financier Daniel Drew to warn: "He who sells what isn't his'n, Must buy it back or go to pris'n."
To manage its own risk, the broker requires the short seller to keep a margin account, and charges interest
of between 2% and 8% depending on the amounts involved.[31]

In 2011, the eruption of the massive China stock frauds on North American equity markets brought a
related risk to light for the short seller. The efforts of research-oriented short sellers to expose these frauds
eventually prompted NASDAQ, NYSE and other exchanges to impose sudden, lengthy trading halts that
froze the values of shorted stocks at artificially high values. Reportedly in some instances, brokers charged
short sellers excessively large amounts of interest based on these high values as the shorts were forced to
continue their borrowings at least until the halts were lifted.[32]

Short sellers tend to temper overvaluation by selling into exuberance. Likewise, short sellers are said to
provide price support by buying when negative sentiment is exacerbated after a significant price decline.
Short selling can have negative implications if it causes a premature or unjustified share price collapse when
the fear of cancellation due to bankruptcy becomes contagious.[33]

Strategies

Hedging

Hedging often represents a means of minimizing the risk from a more complex set of transactions.
Examples of this are:

A farmer who has just planted their wheat wants to lock in the price at which they can sell
after the harvest. The farmer would take a short position in wheat futures.
A market maker in corporate bonds is constantly trading bonds when clients want to buy or
sell. This can create substantial bond positions. The largest risk is that interest rates overall
move. The trader can hedge this risk by selling government bonds short against his long
positions in corporate bonds. In this way, the risk that remains is credit risk of the corporate
bonds.
An options trader may short shares to remain delta neutral so that they are not exposed to
risk from price movements in the stocks that underlie their options

Arbitrage

A short seller may be trying to benefit from market inefficiencies arising from the mispricing of certain
products. Examples of this are

An arbitrageur who buys long futures contracts on a US Treasury security, and sells short the
underlying US Treasury security.

Against the box

One variant of selling short involves a long position. "Selling short against the box" consists of holding a
long position on which the shares have already risen, whereupon one then enters a short sell order for an
equal number of shares. The term box alludes to the days when a safe deposit box was used to store (long)
shares. The purpose of this technique is to lock in paper profits on the long position without having to sell
that position (and possibly incur taxes if said position has appreciated). Once the short position has been
entered, it serves to balance the long position taken earlier. Thus, from that point in time, the profit is locked
in (less brokerage fees and short financing costs), regardless of further fluctuations in the underlying share
price. For example, one can ensure a profit in this way, while delaying sale until the subsequent tax year.

U.S. investors considering entering into a "short against the box" transaction should be aware of the tax
consequences of this transaction. Unless certain conditions are met, the IRS deems a "short against the box"
position to be a "constructive sale" of the long position, which is a taxable event. These conditions include
a requirement that the short position be closed out within 30 days of the end of the year and that the
investor must hold their long position, without entering into any hedging strategies, for a minimum of 60
days after the short position has been closed.[34]

Regulations

United States

The Securities Exchange Act of 1934 gave the Securities and Exchange Commission the power to regulate
short sales.[35] The first official restriction on short selling came in 1938, when the SEC adopted a rule
(known as the uptick rule) that a short sale could only be made when the price of a particular stock was
higher than the previous trade price. The uptick rule aimed to prevent short sales from causing or
exacerbating market price declines.[36] In January 2005, The Securities and Exchange Commission enacted
Regulation SHO to target abusive naked short selling. Regulation SHO was the SEC's first update to short
selling restrictions since the uptick rule in 1938.[37][38]

The regulation contains two key components: the "locate" and the "close-out". The locate component
attempts to reduce failure to deliver securities by requiring a broker possess or have arranged to possess
borrowed shares. The close out component requires that a broker be able to deliver the shares that are to be
shorted.[36][39] In the US, initial public offers (IPOs) cannot be sold short for a month after they start
trading. This mechanism is in place to ensure a degree of price stability during a company's initial trading
period. However, some brokerage firms that specialize in penny stocks (referred to colloquially as bucket
shops) have used the lack of short selling during this month to pump and dump thinly traded IPOs. Canada
and other countries do allow selling IPOs (including U.S. IPOs) short.[40]

The Securities and Exchange Commission initiated a temporary ban on short selling of 799 financial stocks
from 19 September 2008 until 2 October 2008. Greater penalties for naked shorting, by mandating delivery
of stocks at clearing time, were also introduced. Some state governors have been urging state pension
bodies to refrain from lending stock for shorting purposes.[41] An assessment of the effect of the temporary
ban on short-selling in the United States and other countries in the wake of the financial crisis showed that
it had only "little impact" on the movements of stocks, with stock prices moving in the same way as they
would have moved anyhow, but the ban reduced volume and liquidity.[18]

Europe, Australia and China

In the UK, the Financial Services Authority had a moratorium on short selling of 29 leading financial
stocks, effective from 2300 GMT on 19 September 2008 until 16 January 2009.[42] After the ban was
lifted, John McFall, chairman of the Treasury Select Committee, House of Commons, made clear in public
statements and a letter to the FSA that he believed it ought to be extended. Between 19 and 21 September
2008, Australia temporarily banned short selling,[43] and later placed an indefinite ban on naked short
selling.[44] Australia's ban on short selling was further extended for another 28 days on 21 October
2008.[45] Also during September 2008, Germany, Ireland, Switzerland and Canada banned short selling of
leading financial stocks,[46] and France, the Netherlands and Belgium banned naked short selling of
leading financial stocks.[47] By contrast with the approach taken by other countries, Chinese regulators
responded by allowing short selling, along with a package of other market reforms.[48] Short selling was
completely allowed on 31 March 2010, limited to " for large blue chip stocks with good earnings
performance and little price volatility."[49] However, in 2015, short selling was effectively banned due to
legislative restrictions on borrowing stocks following the stock market crash the same year.[50]

Views of short selling

Advocates of short selling argue that the practice is an essential part of the price discovery mechanism.[51]
Financial researchers at Duke University said in a study that short interest is an indicator of poor future
stock performance (the self-fulfilling aspect) and that short sellers exploit market mistakes about firms'
fundamentals.[52]

Such noted investors as Seth Klarman and Warren Buffett have said that short sellers help the market.
Klarman argued that short sellers are a useful counterweight to the widespread bullishness on Wall
Street,[53] while Buffett believes that short sellers are useful in uncovering fraudulent accounting and other
problems at companies.[54]

Shortseller James Chanos received widespread publicity when he was an early critic of the accounting
practices of Enron.[55] Chanos responds to critics of short-selling by pointing to the critical role they played
in identifying problems at Enron, Boston Market and other "financial disasters" over the years.[56] In 2011,
research oriented short sellers were widely acknowledged for exposing the China stock frauds.[57]

Commentator Jim Cramer has expressed concern about short selling and started a petition calling for the
reintroduction of the uptick rule.[58] Books like Don't Blame the Shorts by Robert Sloan and Fubarnomics
by Robert E. Wright suggest Cramer exaggerated the costs of short selling and underestimated the benefits,
which may include the ex ante identification of asset bubbles.

Individual short sellers have been subject to criticism and even litigation. Manuel P. Asensio, for example,
engaged in a lengthy legal battle with the pharmaceutical manufacturer Hemispherx Biopharma.[59]

Several studies of the effectiveness of short selling bans indicate that short selling bans do not contribute to
more moderate market dynamics.[60][61][62][63]

See also
Anthony Elgindy
The Big Short
Inverse exchange-traded fund
James Chanos
Joseph Parnes
Magnetar Capital
Manuel P. Asensio
Margin
Repurchase agreement
Sharia and securities trading
Short squeeze
Socially responsible investing
 Straddle

Citations
1. https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr518.pdf Archived (ht
tps://web.archive.org/web/20161224105105/https://www.newyorkfed.org/medialibrary/medi
a/research/staff_reports/sr518.pdf) 24 December 2016 at the Wayback Machine
2. http://people.stern.nyu.edu/mbrenner/research/short_selling.pdf Archived (https://web.archiv
e.org/web/20170214205910/http://people.stern.nyu.edu/mbrenner/research/short_selling.pd
f) 14 February 2017 at the Wayback Machine
3. http://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?
article=1704&context=njilb Archived (https://web.archive.org/web/20160818084721/http://sc
holarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1704&context=njilb) 18
August 2016 at the Wayback Machine
4. "Archived copy" (https://web.archive.org/web/20120722034426/http://www.imd.org/news/upl
oad/Report.pdf) (PDF). Archived from the original (http://www.imd.org/news/upload/Report.p
df) (PDF) on 22 July 2012. Retrieved 5 July 2016.
5. https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci18-5.pdf Archived
(https://web.archive.org/web/20160818063642/https://www.newyorkfed.org/medialibrary/me
dia/research/current_issues/ci18-5.pdf) 18 August 2016 at the Wayback Machine
6. Lamont, Owen (1 March 2005). "Short Sale Constraints and Overpricing" (https://www.nber.o
rg/reporter/spring05/short-sale-constraints-and-overpricing). NBER. Archived (https://web.arc
hive.org/web/20210128233957/https://www.nber.org/reporter/spring05/short-sale-constraints
-and-overpricing) from the original on 28 January 2021. Retrieved 28 January 2021.
7. Larry Harris (2002). Trading and Exchange: Market Microstructure for Practitioners (https://bo
oks.google.com/books?id=Rd9hDRR1Yx4C&pg=PA41). Oxford University Press. p. 41.
ISBN 978-0195144703.
8. Don M. Chance; Robert Brooks (11 August 2009). An Introduction to Derivatives and Risk
Management (https://books.google.com/books?id=DT0nnLDMYTgC&pg=PA6). South-
Western College. p. 6. ISBN 978-0324601206.
9. " 'Naakt short gaan', een oud-Hollands kunstje" (https://www.nrc.nl/nieuws/2008/07/25/naakt
-short-gaan-een-oud-hollands-kunstje-11578528-a1091676). NRC Handelsblad. 25 July
2008. Archived (https://web.archive.org/web/20230203054151/https://www.nrc.nl/nieuws/20
08/07/25/naakt-short-gaan-een-oud-hollands-kunstje-11578528-a1091676) from the original
on 3 February 2023. Retrieved 22 January 2017.
10. Stanley, Christopher A. (2009). "The Panic Effect: Possible Unintended Consequences of
the Temporary Bans on Short Selling Enacted During the 2008 Financial Crisis" (https://kb.o
su.edu/handle/1811/78357). Entrepreneurial Business Law Journal. 4 (1). hdl:1811/78357 (h
ttps://hdl.handle.net/1811%2F78357). Archived (https://web.archive.org/web/202302030541
50/https://kb.osu.edu/handle/1811/78357) from the original on 3 February 2023. Retrieved
3 May 2021.
11. "Scripophily – PSTA – Professional Scripophily Trade Association" (http://www.encyberpedi
a.com/jacoblittle.htm). Encyberpedia.com. Archived (https://web.archive.org/web/202302030
54155/http://www.encyberpedia.com/jacoblittle.htm) from the original on 3 February 2023.
Retrieved 24 May 2012.
12. "Short sellers have been the villain for 400 years" (https://www.reuters.com/article/reutersEd
ge/idUSTRE48P7CS20080926?PageNumber=2&virtualBrandChannel=0&sp=true).
Reuters. 26 September 2008. Archived (https://web.archive.org/web/20230203054157/http
s://www.reuters.com/article/reutersEdge/idUSTRE48P7CS20080926?PageNumber=2&virtu
alBrandChannel=0&sp=true) from the original on 3 February 2023. Retrieved 28 September
2008.
13. "SEC Release No. 34-55970" (https://www.sec.gov/rules/final/2007/34-55970.pdf) (PDF).
Archived (https://web.archive.org/web/20120715161353/http://sec.gov/rules/final/2007/34-55
970.pdf) (PDF) from the original on 15 July 2012. Retrieved 24 May 2012.
14. Lindgren, Hugo (9 April 2007). "New York Magazine – The Creation of the Hedge Fund" (htt
p://nymag.com/news/features/2007/hedgefunds/30345/). New York. Archived (https://web.arc
hive.org/web/20230203054153/https://nymag.com/news/features/2007/hedgefunds/30345/)
from the original on 3 February 2023. Retrieved 24 May 2012.
15. Lavinio, Stefano (1999). The Hedge Fund Handbook: A Definitive Guide for Analyzing and
Evaluating Alternative Investments (https://books.google.com/books?id=h95B-V4l3w0C&pg
=PA3). McGraw-Hill. pp. 442–443. ISBN 978-0071350303.
16. Madura, Jeff (2009). Financial Markets and Institutions (https://books.google.com/books?id=i
IizpVxYjt0C&pg=PA308). South-Western College Publishing. p. 308. ISBN 978-
1439038840.
17. Harris, Larry (7 October 2008). "A Debate as a Ban on Short-Selling Ends: Did It Make Any
Difference?" (https://www.nytimes.com/2008/10/08/business/08short.html). The New York
Times. Archived (https://web.archive.org/web/20230203054152/https://www.nytimes.com/20
08/10/08/business/08short.html) from the original on 3 February 2023. Retrieved
12 September 2012.
18. Oakley, David (18 December 2008). "Short-selling ban has minimal effect" (https://ghostarchi
ve.org/archive/20221210/http://www.ft.com/intl/cms/s/0/024f75ee-cca3-11dd-acbd-000077b0
7658.html). Financial Times. Archived from the original (https://www.ft.com/intl/cms/s/0/024f7
5ee-cca3-11dd-acbd-000077b07658.html) on 10 December 2022. Retrieved 12 September
2012.
19. Crawford, Alan (18 May 2010). "Germany to Temporarily Ban Naked Short Selling, Some
Swaps of Euro Bonds" (https://www.bloomberg.com/news/2010-05-18/germany-to-start-temp
orary-ban-on-naked-short-selling-of-euro-bonds-banks.html). Bloomberg. Archived (https://w
eb.archive.org/web/20230203054154/https://www.bloomberg.com/news/articles/2010-05-18/
germany-to-start-temporary-ban-on-naked-short-selling-of-euro-bonds-banks) from the
original on 3 February 2023. Retrieved 13 September 2012.
20. Tracy Rucinski; Stephen Jewkes (23 July 2012). "Spain, Portugal and Italy reinstate short-
selling ban" (https://www.reuters.com/article/us-italy-consob-short-selling-idUSBRE86M0US
20120723). Reuters. Archived (https://web.archive.org/web/20230203054155/https://www.re
uters.com/article/us-italy-consob-short-selling-idUSBRE86M0US20120723) from the
original on 3 February 2023. Retrieved 12 September 2012.
21. "The AMF announces a short selling ban for one month" (https://www.amf-france.org/en/new
s-publications/news-releases/amf-news-releases/amf-announces-short-selling-ban-one-mo
nth). AMF. Archived (https://web.archive.org/web/20230203054236/https://www.amf-france.o
rg/en/news-publications/news-releases/amf-news-releases/amf-announces-short-selling-ba
n-one-month) from the original on 3 February 2023. Retrieved 30 March 2020.
22. Smith, Elliot (17 March 2020). "Short-selling bans sweep Europe in the hope of stemming
stock market bleeding" (https://www.cnbc.com/2020/03/17/short-selling-bans-sweep-europe-
in-hope-of-stemming-stock-market-bleeding.html). CNBC. Archived (https://web.archive.org/
web/20200331153734/https://www.cnbc.com/2020/03/17/short-selling-bans-sweep-europe-i
n-hope-of-stemming-stock-market-bleeding.html) from the original on 31 March 2020.
Retrieved 30 March 2020.
23. "Understanding Short Selling – A Primer" (https://web.archive.org/web/20110819152246/htt
p://langasset.com/ishort.htm). Langasset.com. Archived from the original (http://langasset.co
m/ishort.htm) on 19 August 2011. Retrieved 24 May 2012.
24. NASDAQ. About the Short Interest Page (http://www.nasdaq.com/quotes/short-interest.asp
x).
25. SunGard's ShortSide.com (http://www.sungard.com/financialsystems/products/shortsideco
m.aspx) discusses the product.
26. SunGard. SunGard Launches Borrow Indices; First Proxy for Measuring Short Interest on a
Daily Basis (http://www.thefreelibrary.com/SunGard+Launches+Borrow+Indices%3B+First+
Proxy+for+Measuring+Short...-a0123159715). Business Wire.
27. "The market for borrowing stock" (http://faculty.chicagobooth.edu/john.Cochrane/teaching/35
150_advanced_investments/davolio_borrowing_stock_JF.pdf) (PDF). Archived (https://web.
archive.org/web/20130603173838/http://faculty.chicagobooth.edu/john.Cochrane/teaching/3
5150_advanced_investments/davolio_borrowing_stock_JF.pdf) (PDF) from the original on 3
June 2013. Retrieved 25 December 2012.
28. "Lecture 13: Hard to Borrow Securities" (http://www.math.nyu.edu/faculty/avellane/Lecture13
Quant.pdf) (PDF). Archived (https://web.archive.org/web/20130518131233/http://www.math.
nyu.edu/faculty/avellane/Lecture13Quant.pdf) (PDF) from the original on 18 May 2013.
Retrieved 25 December 2012.
29. Greg Land (15 May 2009). "Over-voting at Taser in 2005" (https://www.law.com/almID/12024
30726911/?slreturn=20180410051827). Law.com. Archived (https://web.archive.org/web/20
180510185918/https://www.law.com/almID/1202430726911/?slreturn=20180410051827)
from the original on 10 May 2018. Retrieved 10 May 2018.
30. Arnold, Roger (14 January 2000). "Knowing the Rules of the Shorting Game" (http://www.the
street.com/story/862233/1/knowing-the-rules-of-the-shorting-game.html). TheStreet.
Archived (https://web.archive.org/web/20230203054739/https://www.thestreet.com/personal-
finance/knowing-the-rules-of-the-shorting-game-862233) from the original on 3 February
2023. Retrieved 24 May 2012.
31. "margin account rates schedule" (http://www.scottrade.com/online-brokerage/interest-margin
-rates.html). ScotTrade. 18 June 2011.
32. "Even Short-Sellers Burned by Chinese Shares" (http://online.barrons.com/article/SB50001
424053111904113704576383892664177456.html?ru=yahoo&mod=yahoobarrons).
Barrons. 18 June 2011.
33. Fabozzi, Frank J. (17 November 2004). The Theory and Practice of Short Selling, Chapter 9,
Conclusions and Implications for Investors by Frank J. Fabozzi, editor (https://books.google.
com/books?id=pwXWZzxXxfwC&pg=PP7). ISBN 9780471704331. Archived (https://web.arc
hive.org/web/20230203054748/https://books.google.com/books?id=pwXWZzxXxfwC&pg=P
P7) from the original on 3 February 2023. Retrieved 24 May 2012.
34. "United States IRS Publication 550 Investment Income and Expenses" (https://www.irs.gov/p
ublications/p550/ch04.html#d0e8793). Irs.gov. Archived (https://web.archive.org/web/201810
26064513/https://www.law.cornell.edu/uscode/text/26/1221#d0e8793) from the original on
26 October 2018. Retrieved 24 May 2012.
35. "Securities Exchange Act of 1934" (https://www.sec.gov/about/laws/sea34.pdf) (PDF).
Securities and Exchange Commission. 1934. Archived (https://web.archive.org/web/201201
14052905/http://www.sec.gov/about/laws/sea34.pdf) (PDF) from the original on 14 January
2012. Retrieved 11 September 2017.
36. Lavinio, Stefano (1999). The Hedge Fund Handbook: A Definitive Guide for Analyzing and
Evaluating Alternative Investments (https://books.google.com/books?id=pGs-GBn8-k0C&pg
=PA86). McGraw-Hill. pp. 85–95. ISBN 978-0071350303.
37. S.K. Singh (2009). Bank Regulations (https://books.google.com/books?id=_FUoBlN8p_EC
&pg=PA122). Discovery Publishing House. pp. 122–123. ISBN 978-8183564472.
38. U.S. SEC (11 April 2005). "Division of Market Regulation: Key Points about Regulation
SHO" (https://www.sec.gov/spotlight/keyregshoissues.htm). Archived (https://web.archive.or
g/web/20230203054802/https://www.sec.gov/investor/pubs/regsho.htm) from the original on
3 February 2023. Retrieved 11 September 2017.
39. Young, Matthew G. (2010). The Complete Guide to Selling Stocks Short: Everything You
Need to Know Explained Simply (https://books.google.com/books?id=TM-_yRzNx3cC&pg=
PA178). Atlantic Publishing Group Inc. pp. 178–179. ISBN 978-1601383266.
40. Mahipal Singh (2011). Security Analysis with Investment and Portfolio Management (https://
books.google.com/books?id=pQtdJqdpzUoC&pg=PA233). Gyan Books. p. 233. ISBN 978-
8182055193.
41. Tsang, Michael (19 September 2008). "Short Sellers under Fire in U.S., U.K. After AIG Fall"
(https://www.bloomberg.com/apps/news?pid=20601087&sid=aTHLqfgpnFYw&refer=home).
Bloomberg L.P. Retrieved 11 March 2017.
42. "FSA clamps down on short-selling" (http://news.bbc.co.uk/1/hi/business/7624012.stm).
BBC News. 18 September 2008. Archived (https://web.archive.org/web/20090122090617/htt
p://news.bbc.co.uk/1/hi/business/7624012.stm) from the original on 22 January 2009.
Retrieved 4 January 2010.
43. "The Australian" (http://www.theaustralian.com.au/stockbrokers-feeling-the-squeeze/story-fn
a7dq6e-1111117638688). 2 October 2008.
44. "ASX ban on short selling is indefinite" (https://web.archive.org/web/20081005040752/http://
news.smh.com.au/business/asx-ban-on-short-selling-is-indefinite-20081003-4t16.html). The
Sydney Morning Herald. 3 October 2008. Archived from the original (http://news.smh.com.a
u/business/asx-ban-on-short-selling-is-indefinite-20081003-4t16.html) on 5 October 2008.
45. "Australian Securities and Investments Commission – 08-210 ASIC extends ban on covered
short selling" (https://web.archive.org/web/20120320173610/http://www.asic.gov.au/asic/asi
c.nsf/byheadline/08-210+ASIC+extends+ban+on+covered+short+selling?openDocument).
Asic.gov.au. Archived from the original (http://www.asic.gov.au/asic/asic.nsf/byheadline/08-2
10+ASIC+extends+ban+on+covered+short+selling?openDocument) on 20 March 2012.
Retrieved 24 May 2012.
46. McDonald, Sarah (22 September 2008). "Australian short selling ban goes further than other
bourses" (https://web.archive.org/web/20110927054436/http://www.nbr.co.nz/article/australi
an-short-selling-ban-goes-further-other-bourses-35494). National Business Review.
Archived from the original (http://www.nbr.co.nz/article/australian-short-selling-ban-goes-furt
her-other-bourses-35494) on 27 September 2011. Retrieved 9 November 2011.
47. Ram, Vidya (22 September 2008). "Europe Spooked By Revenge of the Commodities" (http
s://web.archive.org/web/20080922213046/http://www.forbes.com/markets/2008/09/22/briefin
g-europe-update-markets-equity-cx_vr_0922markets12.html). Forbes. Archived from the
original (https://www.forbes.com/markets/2008/09/22/briefing-europe-update-markets-equity-
cx_vr_0922markets12.html) on 22 September 2008.
48. Shen, Samuel (5 October 2008). "UPDATE 2-China to launch stocks margin trade, short
sales" (https://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSH
A10179120081005). Reuters. Archived (https://web.archive.org/web/20210605183647/http
s://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSHA10179120
081005) from the original on 5 June 2021. Retrieved 2 July 2017.
49. Li, Rui; Li, Nan; Li, Jiahui; Wu, Chongfeng (2018). "Short selling, margin buying and stock
return in China market" (https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12229).
Accounting & Finance. 58 (2): 477–501. doi:10.1111/acfi.12229 (https://doi.org/10.1111%2F
acfi.12229). ISSN 1467-629X (https://www.worldcat.org/issn/1467-629X). S2CID 157725706
(https://api.semanticscholar.org/CorpusID:157725706). Archived (https://web.archive.org/we
b/20210605183640/https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12229) from the
original on 5 June 2021. Retrieved 26 February 2021.
50. Chatterjee, Nathaniel Taplin, Saikat (4 August 2015). "China stock exchanges step up
crackdown on short-selling" (https://www.reuters.com/article/us-china-markets-shorting-idUS
KCN0Q909E20150804). Reuters. Archived (https://web.archive.org/web/20210527100002/h
ttps://www.reuters.com/article/us-china-markets-shorting-idUSKCN0Q909E20150804) from
the original on 27 May 2021. Retrieved 26 February 2021.
51. Jones, Charles M.; Lamont, Owen A. (20 September 2001). "Short Sale Constraints And
Stock Returns by C.M Jones and O.A. Lamont" (http://www.nber.org/papers/w8494.pdf)
(PDF). doi:10.2139/ssrn.281514 (https://doi.org/10.2139%2Fssrn.281514). SSRN 281514 (h
ttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=281514). Archived (https://web.archive.o
rg/web/20180602155418/http://www.nber.org/papers/w8494.pdf) (PDF) from the original on
2 June 2018. Retrieved 23 September 2019.
52. "Do Short Sellers Convey Information About Changes in Fundamentals or Risk?" (http://facu
lty.fuqua.duke.edu/seminarscalendar/Short.pdf) (PDF). Archived (https://web.archive.org/we
b/20120222104055/http://faculty.fuqua.duke.edu/seminarscalendar/Short.pdf) (PDF) from
the original on 22 February 2012. Retrieved 24 May 2012.
53. Margin of safety (1991), by Seth Klarman. ISBN 0-88730-510-5
54. Casterline, Rick (1 June 2006). "2006 Berkshire Hathaway Annual Meeting Q&A with
Warren Buffett" (https://web.archive.org/web/20060613161835/http://www.fool.com/news/co
mmentary/2006/commentary06060104.htm). Fool.com. Archived from the original (http://ww
w.fool.com/news/commentary/2006/commentary06060104.htm) on 13 June 2006. Retrieved
24 May 2012.
55. Peterson, Jim (6 July 2002). "Balance Sheet : The silly season isn't over yet" (https://web.arc
hive.org/web/20130531064426/http://www.nytimes.com/2002/07/06/your-money/06iht-macc
ount06_ed3_.html). The New York Times. Archived from the original (https://www.nytimes.co
m/2002/07/06/your-money/06iht-maccount06_ed3_.html) on 31 May 2013. Retrieved
9 August 2009.
56. "Contrarian Investor Sees Economic Crash in China" (https://web.archive.org/web/2010011
2054411/https://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-econo
mic-crash-in-china?mod=retire-planning). Archived from the original (https://finance.yahoo.c
om/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-
planning) on 12 January 2010. Retrieved 28 January 2021.
57. Alpert, Bill (18 June 2011). "B. Alpert "Even Short Sellers Burned by Chinese Shares"
(Barrons 20110618)" (http://online.barrons.com/article/SB500014240531119041137045763
83892664177456.html?ru=yahoo&mod=yahoobarrons). Online.barrons.com. Retrieved
24 May 2012.
58. "TheStreet" (https://web.archive.org/web/20120315133930/http://www.thestreet.com/petitio
n). TheStreet. Archived from the original (http://www.thestreet.com/petition) on 15 March
2012. Retrieved 24 May 2012.
59. Nelson, Brett (26 November 2001). "Short Story" (https://web.archive.org/web/20090810082
753/http://members.forbes.com/forbes/2001/1126/216.html). Forbes. Archived from the
original (https://members.forbes.com/forbes/2001/1126/216.html) on 10 August 2009.
Retrieved 9 August 2009.
60. Marsh I and Niemer N (2008) "The impact of short sales restrictions". Technical report,
commissioned and funded by the International Securities Lending Association (ISLA) the
Alternative Investment Management Association (AIMA) and London Investment Banking
Association (LIBA).
61. Lobanova O, Hamid S. S. and Prakash A. J. (2010) "The impact of short-sale restrictions on
volatility, liquidity, and market efficiency: the evidence from the short-sale ban in the u.s."
Technical report, Florida International University – Department of Finance.
62. Beber A. and Pagano M. (2009) "Short-selling bans around the world: Evidence from the
2007–09 crisis". CSEF Working Papers 241, Centre for Studies in Economics and Finance
(CSEF), University of Naples, Italy.
63. Kerbl S (2010) "Regulatory Medicine Against Financial Market Instability: What Helps And
What Hurts?" (https://arxiv.org/abs/1011.6284) Archived (https://web.archive.org/web/201801
03072702/https://arxiv.org/abs/1011.6284) 3 January 2018 at the Wayback Machine
arXiv.org.

General and cited references

Fleckner, Andreas M. "Regulating Trading Practices (https://ssrn.com/abstract=2476950)" in
The Oxford Handbook of Financial Regulation (Oxford: Oxford University Press, 2015).
ISBN 978-0-19-968720-6.
Sloan, Robert. Don't Blame the Shorts: Why Short Sellers Are Always Blamed for Market
Crashes and Why History Is Repeating Itself (New York: McGraw-Hill Professional, 2009).
ISBN 978-0-07-163686-5.
Wright, Robert E. Fubarnomics: A Lighthearted, Serious Look at America's Economic Ills
(Buffalo, N.Y.: Prometheus, 2010). ISBN 978-1-61614-191-2.

External links
Porsche VW Shortselling Scandal (https://www.telegraph.co.uk/finance/newsbysector/transp
ort/3281537/Porsche-and-VW-share-row-how-Germany-got-revenge-on-the-hedge-fund-loc
usts.html)
"Short-Selling Bans Dampen 130/30 Strategies Worldwide" (http://www.globalinv.com/Sept2
9-08abstract.htm), Global Investment Technology, Sept. 29, 2008
SEC Discussion of Naked Short Selling (https://www.sec.gov/spotlight/keyregshoissues.ht
m)

Retrieved from "https://en.wikipedia.org/w/index.php?title=Short_(finance)&oldid=1159247086"