Price Test Rules for Short Selling Go Under the Microscope
Traders Magazine, December 2006
For the past year-and-a-half, traders have been able to do something they couldn't for the previous 67 years: short stock on a downtick. Not since before 1938, when the Securities and Exchange Commission first imposed restrictions on short selling, at a time when the shorts were vilified for causing the stock market crash of 1929, have the shorts had it so easy. In May 2005, as part of an effort to reform the industry's rules governing short sales, the SEC launched a pilot program allowing traders to short the market's 1,000 largest securities without restriction.
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