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The Short Sale Ballgame

Traders Magazine, January 2004

Jamie Selway

The Securities and Exchange Commission, in a proposal published last fall, took another crack at reforming short selling. If approved, Reg SHO would apply a uniform "plus bid" test - without a market maker exemption - to both listed and Nasdaq securities. In addition, Reg SHO would exempt a sample of liquid names - a third of the Russell 1000 - for a two-year pilot period. Is Reg SHO another Derek Jeter or a Mario Mendoza? Is it a jewel or a bow wow? Here's my scouting report based on three market structure "tools."

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