Free Site Registration

Price Test Rules for Short Selling Go Under the Microscope

Traders Magazine, December 2006

Peter Chapman

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.

Get access to this article and thousands more...

All articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, online technology directory, the iPad App, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and trading strategies.

Already Registered?