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Short Selling Related News
 in chronological order

 See also: Short Selling Related Books, Short Selling Related Scholarly Papers, or Short Selling Home Page.

Table of Contents:
 

A bag of shorts

April 28, 2006
From The Age:
The biggest stock lending positions in the market right now are in Macquarie Group, Centennial Coal, Iluka, Incitec and James Hardie Industries - which is a fair indication of the stockmarket's biggest shorts.

Stock lending usually, but not always, indicates short-selling activity. The annual RiskMetrics corporate governance conference in Melbourne today heard that Australian super funds were making around $900,000 a day from lending their shares to short sellers and other stock borrowers.

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Short selling shouldn’t be sold short

April 24, 2006
From Financial Standard:
The overreaction against short selling and securities lending need to calm down, said Greenwich Alternative Investments.

“Short selling provides liquidity and allows you to make calls in both directions,” said Ryan Pearson, Greenwich senior vice president on a visit to Australia last week.

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Goldman makes the short list

April 16, 2006
From FORTUNE:
Goldman Sachs recently provided a glimpse of one of the rarest occurrences on Wall Street: an analyst recommended that clients bet against a company by selling its shares short. In this case, the company was struggling Seattle thrift Washington Mutual (WM, Fortune 500), which happens to be a Goldman client.

Goldman's short call last Friday made headlines in part because Goldman had just earned millions of dollars in fees for arranging a costly $7 billion recapitalization of WaMu. Five years ago, Goldman and other major investment banks paid over $1.4 billion to settle charges brought by then New York Attorney General Eliot Spitzer that they tainted their research to curry favor investment banking clients. The settlement has yielded a mixed bag: the most egregious conflicts of interest have waned, but aggressive calls to sell a stock are still uncommon.

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Short-selling shift adds to volatility

April 13, 2006
From The Arizona Republic:
The past nine months have been a gut-wrenching period for stock-market investors.

Since mid-2007, the Dow Jones industrial average has suffered more than 45 daily drops of at least 100 points. A volatility index tracked by the Chicago Board Options Exchange has been running 50 percent to more than 100 percent above where it stood early last year.

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Australian Exchange Seeks New Regulations for Short Selling

March 31, 2006
From The Sydney Morning Herald:
The Australian Stock Exchange Friday proposed short-term measures to regulate covered short selling ahead of a government move to remove legal ambiguity around the practice.

Nick Sherry, the minister for corporate law, said the government was planning changes to the Corporations Act in response to recent market volatility.

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Collapse could reveal a sordid tale of short-selling super

March 29, 2006
From The Sydney Morning Herald:
There's a dirty little secret your superannuation fund manager would like to lock away in the bottom drawer. Unfortunately, the collapse yesterday of Opes Prime Group - a Melbourne stockbroker - will probably bring out the ugly truth.

For the past few years, most big super funds have been adding a few extra dollars to your returns - and their fees - by lending out the stocks they buy.

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What is short-selling?

March 21, 2006
From Telegraph.co.uk:
Short-selling is the practice of selling borrowed shares in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in the price of the shares.

For example, shares in Company X are selling for £1 each. A short-seller would borrow 1,000 shares through a broker and sell them immediately for £1,000, hoping the price falls.

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Short-sellers bullish on market's fall

March 13, 2006
From The Chicago Tribune:
Tuesday's surge in stock prices followed by Wednesday's snore should remind investors that uncertainty still rules on Wall Street.

With house prices continuing to drop, no action by the Federal Reserve, including Tuesday's assist for the beleaguered financial sector, is designed to be or is capable of being a silver bullet that will prompt a sustained rally in stocks.

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Socially responsible shorting

March 13, 2006
From Business Spectator:
Al Gore has further burnished his do-gooder reputation. In the wake of his international campaign to raise awareness about global warming, the vice president-cum-Nobel prizewinner has nearly finished raising a big socially-responsible investment, or SRI, fund.

Like most SRI funds, Gore’s $US5 billion vehicle only takes long positions in stocks that meet its environmental and social justice criteria. That may sound more righteous than shorting stocks – a practice associated in the public’s mind with moustache-twirling financial villains. But SRI funds with the courage of their convictions should consider betting against the irresponsible, too. It might even help their returns.

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Who's on the short list?

March 10, 2006
From Business Spectator:
One reason there is a lot of securities lending in Australia is that the ASX did not follow the United States Securities and Exchange Commission in removing the 'uptick rule' in 2007.

This rule says any short sale must not take place below the price of the immediately preceding ordinary sale. It was a part of the original US Securities and Exchange Act in 1934 and was designed to prevent the sort of short-selling free-fall that occurred in October 1929.

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Selling short is the new frontier

March 3, 2006
From Financial Times:
Shortly after being installed as chief investment officer at Calpers, the largest US pension fund, two years ago, Russell Read began making discreet enquiries about using short selling to boost the overall size of his equity holdings.

Mr Read was looking in particular at quantitative managers offering so-called 120/20 strategies. These allow an otherwise conventional equity manager to sell short individual stocks worth up to 20 per cent of its portfolio value and invest the proceeds in additional long share purchases.

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Tighter shorts may put the squeeze on those they are supposed to protect

March 3, 2006
From The Australian:
WHO said this? "Short-selling is primarily responsible for the share price fall. There's been unfair rumour fuelled by those who have a vested interest."

And this? "It's a typical short-seller trick. Take a short position, then send someone to ask a question which suggests we're hiding something."

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Short sellers teach ABC a lesson

February 27, 2006
From News.com.au:
A SHELL-SHOCKED Eddy Groves has lashed out at hedge funds, claiming the mass market shorting of his childcare empire yesterday was "sad for Australia", amid a day of wild trading in which shares in his ABC Learning Centres plunged as much as 70 per cent.

"I am just so shocked when you look at the assets this company has," Mr Groves said.

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Short-selling to begin anytime: BSE chief

February 26, 2006
From Business Standard:
The Bombay Stock Exchange (BSE) is all prepared to roll out institutional short-selling and can do so “anytime”, said Managing Director and Chief Executive Officer Rajnikant Patel.

Short-selling for institutions backed by the stock lending and borrowing mechanism was earlier scheduled to commence from February 1.

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The Advantages of Short Selling

February 14, 2006
From Seeking Alpha:
It always amazes me that so many active investors who pick individual stocks, rather than buy funds or get passive market exposure through index funds and ETF's, are unwilling to express their bearish views through short selling. Instead, they sell outright, or buy puts, or hedge with some other passive device to lower their market exposure.

If you have the guts to buy a stock, presumably you've decided that the stock is at least relatively cheaper than its competitors, or stocks in general. Whatever the insight to that decision should be "reverse engineered" allowing stocks to be identified as unattractive, and thus likely to underperform your picks. There has to be an applicable symmetry to your investment process, otherwise you are deluding yourself that you can pick "winners", if you can't pick relative "losers" as well.

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ASX feeling naked flame

February 14, 2006
From The Sydney Morning Herald:
ASX Ltd's chief executive, Robert Elstone, felt the mood first-hand yesterday. The company produced a stellar result, only to have its shares sold.

In the increasingly complex and sophisticated market for financial products, the range of participants play their own games in the aftermath of the release of financial information. It is their positions that increasingly dictate the market value of a stock, rather than the company's profit performance.

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Short Selling Declines at the NYSE

February 7, 2006
From The Wall Street Journal Online:
Short-selling activity fell at the New York Stock Exchange in late January as fears about a U.S. recession were balanced by cheaper stock valuations and forecasts for the economy to rebound in the second half.

For the two-week period ended Jan. 31, the number of short-selling positions not yet closed out on the Big Board -- called short interest -- fell 1% to 13,709,338,101 from 13,850,660,313 in mid-January.

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Heavy Selling Batters Hong Kong

February 6, 2006
From TheStreet.com:
Asian markets fell the furthest in two weeks ahead of the Chinese New Year, prompted by short selling in Hong Kong, which dragged the index 5.4% lower Wednesday.

The Hang Seng was only open for the morning session, but in that time it dropped 1,339 points, to 23,469. The Nikkei followed, plunging 646 points, or 4.7%, to 13,099. China's Shanghai Composite Index held up better, losing 72 points, or 1.6%, to 4599.

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Short Stories: How to profit from the pending plunge

January 22, 2006
From BloggingStocks:
Although short selling -- the practice of selling borrowed shares with the hope of repaying the loan by buying back the shares at a lower price -- goes against the American belief that stocks always go up, I have long been fascinated with it. Short Stories discusses what works, what doesn't, and what some of the leading lights in shorting stocks think about its opportunities and threats. I describe possible short trades and seek your comments and questions for story ideas. I don't offer any investment advice and I don't trade on any of the posts I write.

BusinessWeek reports that the consumer is tapped out. Can you profit from the combination of a falling market and a cash-starved consumer?

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Immediate Short Selling Opportunity in Bonds

January 20, 2006
From Seeking Alpha:
Investors were fleeing the stock market Friday and investing in the 20 to 30 Year US Treasury Bonds, traded by the ETF, iShares Lehman 20+ Year Treas. Bond (TLT).

The Treasuries have not yet conceded to the report that inflation is surging at its worse level in 17 years (Martin Crutsinger of the Associated Press) as investors are perceiving the government bonds to be a 'lifeboat of safety'; but "safe they ain't" as the Treasures are eventually going to concede to continued reports of inflation, as well as concede to the yield curve which is seen steepening.

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Short Interest Declines at Nasdaq

January 11, 2006
From The Wall Street Journal Online:
Short interest fell at the Nasdaq Stock Market in late December amid a modest gain in technology shares.

For the semimonthly period ended Dec. 31, 2007, the number of short-selling positions not yet closed out at Nasdaq -- so-called short interest -- fell 2% to 8,112,753,852 shares from 8,280,539,309 shares for the period ended in mid-December.

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S&P launches 'shorting' index

January 10, 2006
From FinancialNews-US.com:
Ratings agency and data provider Standard and Poor's has launched what is believed to be the first product that tracks in reverse the performance of the S&P 500, potentially offering investors greater possibilities for shorting the US blue-chip index.

The new index will rise as the S&P 500 falls, incorporating information on both prices and dividends, acting as a proxy for a portfolio of short positions in the index. It may act as a spur for asset managers in Europe and Asia to develop investable products run against it.

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Short Sellers Will Make Indian Market Stronger: Andy Mukherjee

January 3, 2006
From Bloomberg:
Allowing investors to sell shares they don't own is the most significant improvement in the Indian equity market since derivatives were permitted in 2000.

The Indian regulator's decision to relax rules on short- selling from next month is also part of a larger Asian trend.

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Sports Direct short-sellers close positions

January 3, 2006
From Telegraph.co.uk:
Short sellers have closed their positions in Sports Direct as the troubled retailer embarks on a City charm offensive and resumes a share buyback programme.

Index Explorers, a research firm that monitors stock lending to detect short-selling, has seen the amount of stock on loan fall from 10.5pc to 9.5pc in recent weeks - indicating that short sellers have closed their positions.

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Bearish Bets Drop On Nasdaq Market

December 27, 2006
From The Wall Street Journal:
Short-selling activity waned on the Nasdaq Stock Market in the first half of December, even as technology shares lost ground.

In the two weeks ended Dec. 14, short-selling positions not yet closed out at Nasdaq -- so-called short interest -- fell 0.8% to 8,280,539,309 shares from 8,346,448,894 shares at the end of November.

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Short-selling allows two-way bets

December 24, 2006
From The Economic Times:
SEBI's decision to allow short sales to all classes of investors would help deepen the market, improve liquidity and reduce volatility. Stock exchanges should now get the proposal going and put in place appropriate checks and balances. The finance minister had announced the government’s intention to allow delivery-settled short-selling in the budget this year.

SEBI’s secondary market committee too came out in favour of short-selling. Short-selling had been banned in the mistaken belief that it ‘allows’ bears to hammer down the market. In reality, this is not possible beyond a point as there is a limited supply of shares and at some stage short-sellers would have to buy and settle their positions.

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Short-selling on FTSE250 at 3-year high

December 16, 2006
From Telegraph.co.uk:
Hedge funds are beginning to make big bets on a collapse in the share prices of Britain's mid-sized companies.

The latest data reveals that the level of "short" positions - bets on falling prices - is now at its highest for three years on stocks in the FTSE250.

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Morgan recommends shorting Citi stock

December 13, 2006
From InvestmentNews:
A day after Vikram Pandit was named chief executive of Citigroup, his former employer gave him a sharp slap in the face: Morgan Stanley labeled Citi as its “top short idea” for 2008, according to Crain's New York Business.

In a report to clients, Morgan Stanley analyst Betsy Graseck warned that Mr. Pandit, a former Morgan Stanley president, will likely slash Citi’s dividend nearly in half because the big bank’s earnings are deteriorating as losses from collateralized debt obligations and other complex investment vehicles pile up.

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IFAs 'need more education on short selling'

December 5, 2006
From London Stock Exchange:
Independent financial advisers (IFAs) need more information on short selling, an equities expert says.

James Clunie, investment director of UK equities at Scottish Widows Investment Partnership (SWIP), said that this would enable IFAs to make the most of retail client investments.

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Ten Roadblocks to Profitable Short-Selling

December 5, 2006
From TheStreet.com:
Short-selling has come back into vogue in recent months, with the major averages convulsing in response to the mortgage crisis. In fact, we've seen more downside pressure this year than at any time since the 2000-to-2002 bear market. This decline has forced a cadre of long-only traders and investors to revisit this classic strategy.

But short-selling's popularity can be a contrary signal, because bad things will happen when that side of the market gets overcrowded. This is especially true after amateur shorts apply the same methods they use in their stockpicking, but in reverse. In other words, they chase downward momentum without an understanding of the considerable risk.

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Short answer won't be enough to save weak markets

November 30, 2006
From The Globe and Mail:
Now that the unbridled optimism that swept through stock markets has been punctured by that little inconvenience called reality, one has to ask: Was it nothing more than a short-covering rally, a technical bounce courtesy of a bunch of traders who were caught with their pants down?

Short sellers are an essential, if somewhat unseemly, side of modern financial markets. They borrow stock and sell it, hoping the price will tumble so they can buy it back at a discount and return it to the owner, pocketing the difference between the higher and lower prices.

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S.D. Targets Illegal Short Selling

November 28, 2006
From The Motley Fool:
An initiative that would impose state penalties for the illegal short selling of stock shares appears to be the first headed to the 2008 ballot in South Dakota.

It's part of a nationwide effort to convince states to pass their own laws against "naked" short selling, which involves selling borrowed shares without having borrowed them first.

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OVERSTOCK LOBBIES TO FIGHT SHORT-SELLING

November 23, 2006
From The New York Post:
Overstock.com is taking its bitter war to reform short-selling practices to Washington, launching a lobbying group whose goal is to raise investor awareness about so-called "phantom trading."

The group, Coalition Against Phantom Trading, is housed in the offices of Peter Mirijanian, a veteran public relations exec who worked on some of Overstock's initiatives and suggested the idea of a "coalition" to the company's lobbyists.

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Jeremy Warner's Outlook: Markets become short sellers' paradise

November 22, 2006
From The Independent:
As stock markets plunge further into negative territory, there is one group of investors which is sitting pretty – short-selling hedge funds and proprietary trading desks. They've been making a killing out of the market volatility of the last three months.

There is no more fertile territory for short selling than the current environment of fear and uncertainty. Some truly massive short positions are riding on the back of it. Many of them are already seriously in the money.

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Indian Regulator to Allow Mutual Funds to Short-Sell Securities

November 16, 2006
From Bloomberg:
India's capital markets regulator plans to allow mutual funds to sell short and borrow and lend securities.

The date for the proposals to come into effect will be announced later, the Securities & Exchange Board of India said in a statement on its Web site today.

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Short-selling rule revision may be culprit behind volatile markets

November 15, 2006
From The Globe and Mail:
The rising volatility in equity markets over the past few months might not be entirely a reflection of crumbling credit markets and rising risk aversion, as conventional wisdom suggests.

Rather, an obscure rule change governing the short selling of U.S. stocks may be playing a significant role in the markets' mood swings, a U.S. equity research firm says.

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Feel the need to go short?

November 8, 2006
From The Bangkok Post:
With many markets around the world near all-time highs, let's take a look at the options for short-selling and protecting your downside risk - if you believe the markets are a sell here, that is.

Short-selling conjures up thoughts of sophisticated trading strategies with stealth-like precision. Short-sellers are often blamed for causing extreme market volatility and are even branded the enemy by regulators and central banks. When markets fall precipitously, causing global investors to panic and run for the exits, pundits place the blame, unfairly at times, on this band of bears.

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Startech Environmental Engages Service Company to Report on Short Selling

November 5, 2006
From CNNMoney.com:
Startech Environmental Corp. , a fully reporting company and the internationally recognized, award-winning Environment and Energy Company announced today that it has engaged the BUYINS.NET service company to monitor, identify and report on any short selling activity in the Company's common shares.

Peter Scanlon, Startech VP and CFO, said, "Our Quarterly Report, filed with the SEC on September 14, shows Shareholders' Equity in excess of $5 million with approximately $10 million in Cash on Hand, along with Plasma Converter Systems Sales of approximately $25 million. In addition, it shows that the Company has also received additional cash partial-payments of approximately $3.5 million for the Systems sold and being manufactured."

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Don't Sell a Short-Seller Short

October 29, 2006
From The Motley Fool:
Plenty of people think they have the secret to finding stocks that will make them rich. One of the more unusual ways to try to identify stocks poised for quick gains is by buying stocks that are ripe for a short squeeze. These intrepid speculators find companies targeted by short-sellers and buy the stock, hoping to start a chain reaction that will quickly drive the price up.

Before you can understand a short squeeze, you have to know what short-selling is. A short-seller borrows shares of stock from someone and then sells them. After a while, he buys the stock back and returns the shares to their original owner. If the stock price has fallen, the short-seller makes a profit; but if the stock price has increased, the short-seller loses money.

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Under Armour: Potential Short Selling Opportunity

October 29, 2006
From SeekingAlpha:
Third quarter earnings reports are pouring in driving market volatility. Reports from retail companies give us an updated snapshot of the US consumer which has been a strong supporting pillar of the recent market expansion. Under Armour (UA) reports Tuesday morning (10/30) before the open and is one that I will be keeping a close eye on. The company makes cutting edge sportswear and has been rapidly expanding its product offering to include performance apparel as well as cleated shoes and additional accessories.

When I last wrote about UA, I shared concerns about the lack of patent protection for the company’s flagship synthetic material. The second concern revolved around the company’s high price relative to earnings and growth rate. While the patent issue remains the same, Under Armour has continues to grow the value of its name brand with its aggressive marketing strategy. That has pushed the stock higher to the point it is now trading above 45 times the consensus estimates for 2008. My original short thesis was ill timed as investors became excited about the expansion into cleated footwear. More recently the stock has given up some of those gains and analysts are pointing to a warmer fall season which has not motivated consumers to stock up on warmer winter sportswear.

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Short selling: Profit from overpriced stocks

October 21, 2006
From The Economic Times:
Short selling of shares is when the seller does not own the shares. The sale is completed by delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short. Short sellers make money if the stock goes down in price.

The main reason for going short is to speculate and profit from an overpriced stock or market. It is also used to hedge, i.e., protect other long positions with offsetting short positions. When an investor goes short, he is anticipating a decrease in the security price.

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Three Risks Every Short-Seller Must Know

October 18, 2006
From TheStreet.com:
In the previous two installments of The Finance Professor, I covered the mechanics of a short stock sale and the trading strategies that underpin short-selling. Now to close out this trilogy of short-selling lessons, I will focus on the inherent risks in short-selling and how you can manage these risks.

1. Trading Risk

When an individual "shorts" a stock, he or she is making a judgment call that the stock will decline in price. This is completely opposite to the position taken by a "long" buyer who anticipates the stock will rise in value.

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Mutual funds add short selling to their arsenals

October 15, 2006
From The Globe and Mail:
When making money for his mutual fund investors, Gary Selke wants all the weapons possible to do battle with a stock market downturn.

The chief executive officer of Front Street Capital Inc. says that's why his firm got regulatory approval to be able to short stocks in mutual funds up to 20 per cent of the value of a fund.

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Short selling a risky money `gamble'

October 15, 2006
From TheStar.com:
Short selling is a lot of things but it certainly isn't for the faint of heart.

Here's how it works: you contact your broker and borrow a number of shares in a company that you think is about to suffer a bad case of deteriorating share price.

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Sandell Settles SEC Charges Over Katrina Short Sales

October 11, 2006
From The Wall Street Journal Online:
The Securities and Exchange Commission said Wednesday it had reached an $8 million settlement with hedge fund adviser Sandell Asset Management Corp. over improper short sales made in the wake of Hurricane Katrina.

The SEC said the firm moved aggressively in the days after the storm to sell short its Hibernia Corp. holdings because of concerns that Capital One Financial Corp. would lower its proposed acquisition price for the New Orleans bank because of the massive damage to the area.

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Three Strategies Every Short Seller Must Know

October 11, 2006
From TheStreet.com:
In the last installment of The Finance Professor, I explained the mechanics and operational aspects of short selling. Now I want to address short selling from a trading and investment perspective.

There are several factors that will motivate a trader or investor to short sell a security. Here are the three main strategies and the reasoning behind them.

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Bearish Positions Rise on Big Board

October 5, 2006
From The Wall Street Journal Online:
 Short-selling activity inched higher at the New York Stock Exchange during latest two-week reporting period, which included a solid market rally that hurt the value of most bearish bets.

For the period ending Sept. 28, the number of short-selling positions not yet closed out at NYSE -- so-called short interest -- rose 0.3% to 11,878,834,897 shares from 11,841,051,529 shares in mid-September.

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Absolute Capital says rivals hit funds with strategic shorting

October 4, 2006
From Citywire:
 Hedge fund Absolute Capital Management (ACM) says rivals seeking to take advantage of its recent difficulties by shorting equities in which it has a stake contributed to a decline in the net asset value of several of its funds last month.

Also knocking the NAV was the drop in the value of five million ACM shares held by three of the funds since 31 August, when they were worth 434p apiece, AIM-listed ACM (ACMH) said.

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Canada: Proposed Rules May Lead To Increased Short Selling Of Canadian Securities

September 19, 2006
From Mondaq:
 On September 7, 2007, Market Regulation Services Inc. (RS), which administers and enforces trading rules for Canadian marketplaces, including the TSX, TSX Venture Exchange, CNQ and ATS systems, published for comment a series of proposed changes to the existing rules governing short selling. The proposals are subject to a one-month comment period that will expire on October 9, 2007.

Most significantly, these proposed rules would repeal the existing "tick test" – in other words, remove the restrictions on the price at which a short sale may be made. Under the current rules, market participants may not generally make a short sale of a security unless the price is at or above the last sale price for that security (normally determined by reference to trading information from the principal market for that security). The proposed rule, however, would provide a new discretion to RS to designate a security as ineligible to be sold short. RS has indicated that it would expect to exercise that discretion if, in its view, there is evidence of excessive "failed trade" rates in a security, and that the discretion would be exercised only with the agreement of the applicable Canadian securities regulators.

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Slowdown in M&A activity provides short selling opportunities - BlackRock

September 18, 2006
From Forbes:
 The sharp slowdown in mergers and acquisitions in recent weeks and turmoil in the financial sector has created a fertile environment to hunt for short positions, according to a specialist fund manager.

Mark Lyttleton, portfolio manager of the BlackRock UK Absolute Alpha Fund, a UCITS III compliant fund open to retail investors that can take long and short positions, said companies with poor fundamentals that had previously been buoyed by takeover speculation are now viable short candidates as tougher credit conditions and market volatility has put a damper on M&A activity.

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Timing key to short sales: Sebi

September 13, 2006
From Business Standard:
 The Securities and Exchange Board of India (Sebi) fears the introduction of short selling now would lead to more choppiness in the market, which had seen bouts of volatility in recent weeks amid the turmoil in the US subprime mortgage market.

The markets regulator would, however, introduce short selling in this financial year itself, chairman M Damodaran said.

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Short-Selling Will Short-Change You

September 11, 2006
From The Motley Fool:
 Short-selling is the process of selling borrowed shares with the hope of buying them back at a lower price. To me, it's a sucker's bet. The odds are stacked against you. The likelihood of permanent loss of capital is greater than if you simply go long, and your potential gain is fixed. An unlevered short position has a maximum payoff ratio of just 2-to-1.

Throughout their careers, Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) Warren Buffett and Charlie Munger have typically avoided shorting stocks. If the world's best aren't doing it, odds are you shouldn't be doing it, either. I know that as an ardent disciple of Buffett and Benjamin Graham, I will most likely go through my entire investment career without having ever shorted a single share.

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Level playing field needed for short selling?

September 6, 2006
From Moneycontrol.com:
 The Reserve Bank has agreed to the scheme, Sebi has approved it and the exchanges have said they are prepared to launch it. So what's holding back institutional short selling & stock lending and borrowing being a reality.

A level playing field! That’s what regulator Sebi wanted to give institutional investors by approving the short selling and stock lending and borrowing scheme for them. After all retail investors were allowed to short sell. Only a few months back, the scheme had been unanimously approved, but it’s still not seen the light of day. Sources say that the scheme has been delayed because of the challenges thrown up by a tax tangle.

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Defending short sellers, at least in the short term

September 3, 2006
From USA Today:
 Q: Are short sellers the reason stocks are falling so much lately?

A: Whenever the stock market falls, bullish investors blame short sellers.

Shorts are investors who make money when stock prices fall. Short sellers borrow stock from other investors, sell the shares and then wait. If the stock falls, the short sellers buy the shares back at a lower price, return them and pocket the differenece in price.

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Short sellers panicked over Bombardier

August 31, 2006
From TheStar.com:
 Last Tuesday we had that scary selloff. Near the close the Dow was off 280 points, the S&P 500 was negative 34 and the TSX composite was down more than 200. I nervously scanned the ticker tape for anything that was up on the day and found only a handful of income trusts posting small gains.

Nervous money was chasing yield and yield is the one thing absent from my portfolio.

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Taiwan relaxes short-selling restrictions

August 31, 2006
From FinanceAsia.com:
 The Taiwan Stock Exchange is to increase the number of stocks that can be shorted from next week. Stock exchange chairman, Rong I-Wu, told FinanceAsia that shorting restrictions would be lifted on the 100 stocks that comprise the TSEC Taiwan Mid-Cap 100 Index and exchange traded funds.

Rong says the exchange’s regulator, the Financial Supervisory Commission (FSC), had already approved the regulation and short selling would be allowed once the stock exchange had changed its rules and made the necessary IT changes. This is expected next week.

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Bearish Bets Fall on the NYSE

August 22, 2006
From The Wall Street Journal Online:
 Short-selling activity fell for the first time in six months at the New York Stock Exchange as bearish investors seized a market pullback as an opportunity to book profits.

For the monthly period ending Aug. 15, the number of short-selling positions not yet closed out at NYSE -- so-called short interest -- fell 3.5% to 12,492,322,636 shares from 12,950,726,148 shares in mid-July.

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US August short selling data to be closely watched

August 20, 2006
From Reuters:
 As the stock exchanges prepare to release their monthly short interest reports this week, Wall Street is waiting with more anticipation than usual.

This month's short selling data marks the first full month in which investors will be able to see how the removal of the "uptick rule," which restricted how short sellers could trade, has affected the markets.

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CBDT paves way for short selling

August 15, 2006
From Business Standard:
 The Central Board of Direct Taxes (CBDT) has clarified that lending and borrowing of shares for short selling in equities will not attract capital gains tax.

With this clarification one of the important hurdles in the way of permitting short selling on the stock exchanges has been cleared.

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Analysts fear shorting effect

August 10, 2006
From The Globe and Mail:
 A rule change that has made it easier for short sellers to execute trades may be partly responsible for wild swings in the stock market over the past several weeks.

While the market is also facing considerable headwind from uncertainty over the housing market and the economy, the removal of the restrictive "uptick rule" for short sellers may be accelerating market declines, analysts say.

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Markets give short-sellers long-awaited gains

August 6, 2006
From Reuters UK:
 Short-sellers are hot again after five years out in the cold, fuelled by a U.S. subprime mortgage crisis that could extend their run of healthy returns for months to come, industry experts said on Friday.

Jim Chanos of Kynikos Associates, among the most prominent short-sellers, has been short on Australia's Macquarie Bank (MBL.AX: Quote, Profile , Research) and his call has paid off handsomely. The stock slid 10.7 percent on Wednesday after unveiling likely losses of up to 25 percent in two funds exposed to the U.S. subprime crisis.

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Short Stories: Coast Financial (CFHI) buyout highlights a risk of short selling

August 4, 2006
From BloggingStocks:
 This April -- after returning from a visit to Sarasota, FL where I read about a bank that lent to a bankrupt developer -- I recommended selling short shares of Coast Financial Holdings Inc. (NASDAQ: CFHI) at $6.90 a share. Covering that position on Friday, at $2.28, would have generated a 203% return.

But it's too late for that now. That's because The Sarasota Herald Tribune reports that a privately held St. Louis bank, First Banks, Inc., will acquire Coast for $3.40 a share -- or $22 million. In after hours trading, Coast traded up to $2.90. So if an investor could cover the short position at that price, the return on my short call would decline to 138%.

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Could Short-Sellers Tip the Boat, Sending Markets to the Depths?

July 31, 2006
From The Wall Street Journal Online:
 For the past five years, investors have fired their cannons out of just one side of the ship. Stock markets have risen, and investors have done well simply by "going long," or owning shares outright. That has made for dismal returns among "short-sellers," who bet on prices falling by borrowing shares and selling them in the hope of buying them back cheaply later.

Yet now the short-sellers' time may have come.

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Short sellers bank on financial sector ETF

July 30, 2006
From MarketWatch:
 Professional money managers and hedge funds have ramped up short positions in a popular exchange-traded fund tracking the financial-services sector as investors grow increasingly concerned about credit quality, interest rates and slowing corporate profits.

Those moves looked prescient last week as banks, brokers and other financial services stocks took the brunt of the market's downturn. Investors are worrying that problems in the subprime-mortgage market, which include higher defaults and foreclosures resulting from the housing downturn, could spread to other areas of the credit markets.

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NYSE short interest hits record again in July

July 19, 2006
From Reuters:
 Short interest on the New York Stock Exchange rose 3.9 percent in July to another record high, the exchange said on Thursday, signaling a rise in bearish sentiment among investors.

As of July 15, the number of short-selling positions rose to about 12.95 billion shares from 12.47 billion shares in the previous month.

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Naked Shorting Case Gains Traction

July 18, 2006
From Forbes:
 A California state court gave Overstock.com's $3.5 billion lawsuit against 10 Wall Street banks a boost Tuesday, saying the company has made a viable case for its claims of market manipulation.

The suit, filed in February, accuses the big banks of participating in a "massive" scheme to manipulate Overstock.com (nasdaq: OSTK - news - people ) shares by allowing naked short selling, in which a trader doesn't properly borrow stocks before selling them short. That leads to trade settlement failures and puts downward pressure on a stock.

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Short Selling

July 7, 2006
From The Washington Post:
 Nell Henderson's article on commodities trading ["Glittering and Gushing; Once Seen as Risky, Commodities Are Attracting Small Investors," Business, June 24] made me wonder if the author had ever bought or sold a futures contract, because she completely omitted a key point.

One can make (or lose) just as much money if a commodity's price plummets as if it soars. If you short sell a commodity, you are speculating that it will go down in price; you are selling something that you don't own with the expectation of buying it back at a later date at a lower price.

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Investor Jim Rogers says sell Wall Street banks

July 5, 2006
From Reuters:
 Fund manager and investment author Jim Rogers said he was selling stock in Wall Street banks because of a likely housing market slump and suggested buying sugar as a way into commodities.

Rogers, who co-founded the Qantum hedge fund with billionaire investor George Soros in 1970, is a long-time commodity bull and believes that fast growth in Asia, especially China, makes the region more attractive to investors than the United States or Europe.

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SEBI: Institutional investor short selling to be allowed "soon"

June 22, 2006
From Domain-B.com:
 Institutional investors may soon be able to short sell shares, settled by delivery, in the Indian stock exchanges. The Securities and Exchange Board of India (SEBI) chairman, M Damodaran, has given an indication to this effect here today.

"Short-selling by institutions will soon be allowed," Damodaran told reporters on the sidelines of Financial Planning Congress 2007, organised by the Financial Planning Standards Board India.

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SEC cracks down on abusive short selling

June 21, 2006
From InvestmentNews:
 The Securities and Exchange Commission yesterday voted to enact stronger measures to discourage abusive short selling of stock.

The group will amend Rule 105 of Regulation M, which originally guarded against traders short-selling securities in connection with a public offering.

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The Coming 130/30 Short Selling Flood: Time To Face the Fee Transparency Music

June 18, 2006
From SeekingAlpha:
 Managing a hedge fund requires a veritable arsenal of trading tools. Among them are the trusty duo of leverage and short-selling. The arms merchants in these pitched financial battles are the prime brokerages - the bank divisions that cater to the needs of nearly all hedge funds. Apparently, it’s good work if you can find it. Hedgeworld cites a new study that pegs the industry at “$8 billion to $10 billion annually”.

Lending money is an ancient business. But what’s not so old is the business of facilitating short-sales (short-selling began in the 18th century). And the business of short-selling is about to change dramatically with the entry of what seems to be a flood of traditional managers into the 130/30 space. This will inevitably put new pressures on the prime brokerages and force them to address a common concern: fee transparency.

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Private Equity Squeezes the Shorts

June 18, 2006
From BusinessWeek:
 It has never been more popular to bet against stocks. Once the realm of a few specialists, the financial alchemy of turning a garbage stock into gold by shorting it has moved into the mainstream: The strategy is now employed routinely by thousands of individual traders, hedge funds, mutual funds, and others.

Short interest on the New York Stock Exchange hit 3.1% of all listed shares in May, the highest level since 1931, according to research firm Bespoke Investment Group.

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S.E.C. Ends Decades-Old Price Limits on Short Selling

June 14, 2006
From The New York Times:
 The Securities and Exchange Commission voted yesterday to end price restrictions on short selling, meaning that investors seeking to sell a share that they do not own will no longer be barred from doing so because the price of the stock is falling.

The 5-to-0 vote, ending a rule that had been in place since 1938, when short sellers were blamed by some critics for having caused the 1929 market crash and the Depression that followed, came as the commission also voted to make it harder to engage in naked shorting, the practice of selling shares that have not been purchased or borrowed.

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Short selling: Looking for the worst in every stock

June 14, 2006
From USA Today:
 Q: I've heard there are people "shorting" a stock I own. How do I find out how many people are doing it?

A: No matter how bullish things look for a stock, there are almost always investors willing to sell it short.

Bearish investors have several ways to bet a stock will fall, including so-called short selling. This is where an investor borrows shares of a stock, promises to return them in the future, and then sells them. If the short seller is right thinking that the stock will drop, he can then buy the shares back at a lower price, return the shares to the original owner and keep the difference between the price he got when he sold and the new, lower price.

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Think the market is overheating? New ways to short it

June 6, 2006
From BloggingStocks:
 With the market climbing to new highs, many investors are nervous. Some feel that the market is underestimating many potential risks, and they worry that it's "priced for perfection." Here at BloggingStocks, Gary Sattler is predicting a 15-20% pullback. If you think a pullback is likely, there are a few new ways to try to profit from it outlined in a recent article in Business Week. ProShares has launched 29 short-selling ETFs in the past 10 months, and these are probably the best bet for individual investors who want to short the market. The reason? Your risk is limited to the amount you put in.

With an ordinary short sale, your risk is theoretically unlimited -- If you short at $15 and it goes to $50, you are on the hook for a lot of money. But with ETFs, you can only lose the amount you invest. Take a look at all of ProShares's short-ETFs and, if you're feeling really bearish (and greedy), consider the Ultra funds. These funds are designed to give twice the return of the ordinary short funds. If the market declines by 3%, you make 6%. Of course, the opposite is also true.

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Thailand to allow short selling

June 5, 2006
From AsianInvestor.net:
 A week after it liberalised certain mutual fund laws, the Securities and Exchange Commission of Thailand (SET) has announced that it will develop an integrated system for short selling securities. Although the regulator and the Thailand Securities Depository will meet with the industry at the end of the month to get opinions, it is expected that by the fourth quarter asset managers will be able to short sell securities worth up to 5% of a fund’s NAV.

Under the plan, the Thailand Security Depository, which is a subsidiary of the Stock Exchange of Thailand, will fork out roughly Bt70 million to develop an integrated system for short selling in an attempt to further develop the country’s securities lending and borrowing market.

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Short selling is the latest thrill

May 29, 2006
From The Globe and Mail:
 The new high-risk fad - not sky diving or bungee-jumping; it's short selling in a bull market.

Risky it may be, but there are apparently many willing to play the game. Short-selling activity on the New York Stock Exchange is at an all-time high, even though the Dow Jones industrial average keeps racking up record highs.

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Sebi to allow short selling by first week of July

May 28, 2006
From Rediff News:
 After a gap of more than six years, the Securities and Exchange Board of India is set to roll out a more sophisticated version of short-selling in equity markets for both domestic and foreign institutional investors in the first week of July.

Under the proposed scheme, short selling in individual scrips will be capped at 10 per cent of the free float of shares of any company. The free float of a listed security is the proportion of shares available for purchase in the market by investors.

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Short selling, more and more painful each day

May 23, 2006
From BloggingStocks:
 There was something a bit shocking yesterday: the market keeps pumping higher and higher each day, but the short sellers just can't seem to get enough pain. Joe Public needs to always remember that short sellers often have reasons for short selling other than just a simple bet that the rest of the world got it wrong; These could include hedging, shorting "against the box," options activity, or a dozen other scenarios. But the truth is that when you see it this persistent you can rest assured that some short sellers are just adding to a losing position time after time without being able to admit defeat.

The truth is that if the DJIA components were just old dead dinosaurs, they wouldn't keep putting in new high after new high. The short sellers missed this phenomenon and haven't learned to admit the agony of defeat. Only four of the twenty-eight components saw a drop in short interest.

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Short-Selling Tick Tests on the Front Burner

May 23, 2006
From Traders Online:
 Should market makers be able to short small-cap stocks on a downtick? Should exchanges be able to regulate short selling at all? Will the Securities and Exchange Commission green-light full-blown short selling by July 9, the day Regulation NMS goes into effect for broker-dealers?

Those are three of the more important questions outstanding in the wake of the SEC's proposal to permit unfettered short selling across stocks of all sizes. The regulator made its proposal last December, after sifting through data and observations made during the two-year-old Regulation SHO pilot.

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Stop selling 'short-selling' short

May 18, 2006
From Yahoo! News:
 They profit from pessimism. They hope for bad things to happen. They wipe out shareholder value. Those are just some of the criticisms leveled against short-sellers. Such attacks, however, are misguided. Indeed, in the world of investing, few practices are as maligned – and misunderstood – as short-selling.

In essence, short sellers borrow a company's shares and immediately sell them with the expectation that the share price will fall. If it rises, they can face massive losses. But if the price does fall, short-sellers buy back the shares at a lower cost, keep the profit, and then return the shares to their original owner.

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The Re-Short

May 17, 2006
From PROTRADE:
 This began as a comment, but it quicky surpassed the 1000 character limit. I'm relatively new but I'm going to throw out what I've learned so far about a topic that not everyone seems to grasp.

Since people may not understand re-shorting:

Re-shorting is selling a shorted stock that has made a profit in order to short a higher number of shares of that stock.

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The Short Sell Made Simple

May 11, 2006
From BusinessWeek:
 It's not only the bulls who cheer new highs on the Dow Jones industrial average and the Standard & Poor's 500-stock index. Lofty stock prices also make the bears more ferocious.

The reason: They sell stocks short. That is, they borrow them, sell them, and hope to profit by replacing the borrowed shares at lower prices. The lower prices go, the more money they make, and the higher the starting point, the more profit they see below.

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April Was An Especially Bad Month for the Hedge Fund Shorts

May 9, 2006
From Yahoo! Finance:
 April was an especially cruel month for hedge funds that focus on short selling. According to Hedge Fund Research Inc, this sector of the hedge fund world had its worst month (-3.14%) since May 2005 (-3.42%). In addition to the Dow's winning streak (up 24 out of the last 28 trading days), managers of short funds are most likely frustrated that the stocks going up the most just happen to be the ones in their portfolios!

According to short interest data released in April, the S&P 500 stocks that have the highest short interest as a percentage of market value are precisely the ones that have done the best.

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SWIP adds to its short-selling capabilities

April 27, 2006
From Citywire:
 Scottish Widows Investment Partnership (SWIP) has hired James Clunie to develop its short-selling capabilities.

This follows the launch of three absolute returns funds last July which already use short-selling: the UK fund, the bond fund and the macro fund.

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NYSE Experiences Record Short Selling

April 20, 2006
From SeekingAlpha:
 No wonder China's 4.5% correction had so little impact here: There are a record number of bearish bets made on the NYSE.

We had mentioned back in October that the then record-setting short interest on the Nasdaq was precluding a major correction from occurring.

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BankUnited leader complains of short selling, plans buyback

April 19, 2006
From The South Florida Business Journal:
 BankUnited Financial Corp. will use some proceeds from a new capital offering to buy back shares of its stock and possibly to buy other Florida banks.

The company's chairman and chief executive officer, Alfred Camner, described those plans on a Thursday morning conference call with analysts. He also spoke against short sellers he said are trading down BankUnited stock.

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Shorting hedgers do worst of all

April 17, 2006
From The Sydney Morning Herald:
 RETAIL traders who have succumbed to slick marketing campaigns for CFDs ("contracts for difference") may like to ponder this sobering statistic.

Goldman Sachs JBWere research looking at the performance of the strategies of 1800 hedge funds over the past 17 years has found the funds that specialised in the strategy of "short-selling" ranked stone, motherless last out of the 21 strategies considered.

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Short Selling Comes to India -- What Investors Should Know

April 16, 2006
From PR Newswire:
 Securities regulators in India have acted to allow short-selling for the first time -- but investors should approach the opportunity with even more caution than they bring to shorting in other markets, say the principals at Hudson Fairfax Group, LLC, an investment firm focused on India.

"The opportunity to short Indian securities is significant and allows new ways to hedge against risk and benefit when prices drop," said Michael Purves, Partner and CFO of Hudson Fairfax Group. "But Indian markets are not like others. This is a market that has gone up by over 40% in each of the last two years.

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Five Plays for the Pessimistic

April 12, 2006
From BusinessWeek:
 Is short-selling the last refuge of the scoundrel? It's sometimes said that making short plays—betting that the stocks, bonds, or other securities will go down—is unpatriotic, as if pessimism and money can't mix. Nonsense. There's no reason red-blooded, true-blue market players should only profit from securities on the way up. While there's plenty of money to be made when the market advances, there are also ways to gain from a downturn, whether it's the sharp sell-off that investors saw in February or the prolonged doldrums of the first years of this decade.

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Don't Sell Short Selling Short

April 7, 2006
From LewRockwell.com:
 Stockholders and managers of firms, whose interests lie in higher prices for what they own or manage, miss few opportunities to deride short sellers. As Holman Jenkins of the Wall Street Journal put it, "short selling is a business widely unpopular with everyone who has a stake in seeing stock prices go up."

Regulators, whose blunders short sellers frequently reveal by discovering fraud that escaped their attention, respond similarly. That combination of interests helps explain why, at various times, short selling has been banned in many countries, including England, France and Japan.

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SEC to Ban Short-Sale Price Tests

January 31, 2006
From Traders Online:
 The Securities and Exchange Commission, following a two-year trial period, is proposing to permanently abolish price tests for short sales.

If the regulator gets its way, traders will remain free to short stock on a downtick, something they've been able to do so since May 2005. That's when the SEC instituted a pilot program as part of Regulation SHO that temporarily abolished the 67-year-old price-test rules.

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Short Selling Declines 0.6% on Nasdaq

January 24, 2006
From The Wall Street Journal:
 Short-selling activity slipped on the Nasdaq Stock Market, as technology shares got off to a solid start in 2007 that hurt the value of many bearish bets.

For the monthly period ending Jan. 12, the number of short-selling positions not yet closed out at ...

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The long & short of short selling

January 21, 2006
From The Economic Times:
 Short-selling for institutions in the cash market is expected to become a reality in 2007.

Though the devil always lies in the details, market participants feel that this is a move in the right direction.

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Bursa to ease short-selling rules, start new Islamic index

January 19, 2006
From Business Times:
 BURSA Malaysia will ease controls over the short selling of securities after removing a nine-year ban and introduce a new index and contract to draw more investors and raise trading.

The local bourse plans to introduce a new Islamic index next week and start the trading of US dollar crude palm oil (CPO) contracts, chief executive officer Datuk Yusli Mohamed Yusoff said in an interview in Kuala Lumpur.

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Bursa first and only stock in short-selling pool

January 9, 2006
From Business Times:
 THERE are now 62,500 shares of Bursa Malaysia Bhd available for investors that are bold enough to borrow and short the counter - the first and the only batch of shares in the lending pool - but there could be few takers.

Regulated short-selling and the lending and borrowing of shares are now allowed starting last week, but there has been no trade so far as brokers and investors have yet to grasp the system fully.

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Regulator cracks down on naked short sales

January 9, 2006
From The Toronto Star:
 The former portfolio manager of a $200 million (U.S.) New York-based hedge fund has agreed to pay $110,000 to settle charges that he took part in an illegal trading scheme, in one of a trio of recent fraud cases that involve "naked" short-selling in Canada.

In the last year, the U.S. Securities and Exchange Commission – after receiving help from the Investment Dealers Association of Canada – has filed fraud charges in three separate cases against American hedge funds, based on similar allegations.

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Initial response to short selling may be slow, say analysts

December 27, 2006
From Business Times:
 THERE will be few takers initially once regulated short selling (RSS) makes its comeback on January 3 after nearly 10 years, but interest should pick up gradually, analysts say.

They said early hiccups will include a potentially expensive RSS environment, putting many participating organisations on the sidelines.

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Universal Express CEO to Discuss Naked Short Selling on MN1

December 27, 2006
From Yahoo! Finance:
 Mr. Richard Altomare, CEO of Universal Express, Inc. (OTC BB:USXP.OB - News), will be featured live on Market News First (http://www.mn1.com) for an exclusive interview with the MN1 news team. The interview is slated for Dec. 29, 2006 at 11:00 a.m. CDT.

Altomare intends to discuss the company's current Saudi funding, acquisitions, the Jackson family memorabilia auction, naked short selling, and future plans for Universal Express as it ushers in the New Year.

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SEC to consider hedge fund, short-selling rules

November 28, 2006
From MarketWatch:
 Taking a new tack in restricting hedge funds, securities regulators next week will consider requiring individual investors to have a bigger wallet before buying into the lightly regulated funds.

At a public meeting on Monday, the Securities and Exchange Commission will weigh revising the criteria as a way of ensuring that hedge-fund investors are able to withstand the higher risk associated with hedge funds.

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Home builder short-selling down in November, still high overall

November 22, 2006
From MarketWatch:
 Skeptics were slightly less cynical toward home builders over the past month as the number of home-building shares being shorted fell 1.5%, according to a new Bank of America report.

However, the study, released Wednesday, shows cynicism and short-selling still remain high on a historical basis.

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Short Stories: Is Tembec headed for the wood chipper?

November 20, 2006
From BloggingStocks:
 Although short selling -- the practice of selling borrowed shares with the hope of repaying the loan by buying back the shares at a lower price -- goes against the American belief that stocks always go up, I have long been fascinated with it. My plan for my new blog series, Short Stories, is to discuss what works, what doesn't, and what some of the leading lights in shorting stocks think about its opportunities and threats. I will describe possible short trades and I'll seek your comments and questions for story ideas. I won't be offering any investment advice and I won't trade on any of the posts I write.

Like Abitibi, Tembec Industries (TSX: TBC) is a Canadian lumber company exposed to the slumping US housing market. This heavily indebted company could be at risk of bankruptcy if it can't pay its lenders.

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Is short-selling driving up stock prices?

November 6, 2006
From The Enquirer:
 How about this for whacky financial markets at work? The bears could be behind the current stock-price bull run.

Of course, the drop in oil prices, tame inflation data and solid earnings growth have helped stocks plow ahead. But some on Wall Street believe investors who have been scrambling to cover bets that stocks would fall may be propelling a portion of the gains, too

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SEC Settles Short-Selling Case for $1.6M

November 6, 2006
From The Houston Chronicle:
 A Bermuda company and its sole trader have agreed to pay $1.6 million to settle civil charges of engaging trading abuses in connection with 176 follow-on public offerings from January 2001 through July 2005, the Securities and Exchange Commission said on Monday.

Solar Group and James Todd, the trader, were accused of shorting stocks just before the prices for follow-on offerings were set, in violation of trading rules. They settled without admitting or denying wrongdoing.

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Five-day extension on short sales a breath of fresh air for gilts

November 1, 2006
From Business Standard:
 Banks and primary dealers can now cover short positions within an extended period of 5 trading days.

The government securities market is expected to deepen further with the Reserve Bank of India (RBI) allowing short-selling for an extended period.

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SEC Focuses on Improper Short Selling With Sandell Fund Case

November 1, 2006
From Bloomberg:
 The U.S. Securities and Exchange Commission may impose penalties on a hedge-fund manager for improper trading, the agency's first ``naked-short'' case since its chairman said he was concerned about the practice in July.

The SEC staff plans to recommend the commission take civil action against Sandell Asset Management Corp. for trading in shares of Hibernia Corp., two of the firm's investors said. The SEC has been investigating New York-based Sandell, which manages $4.5 billion, since the start of the year, according to the investors, who said they received a letter from the firm explaining the situation.

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Short selling permitted in future deals for November counter

October 20, 2006
From The International News:
 Securities and Exchange Commission of Pakistan (SECP) gave Wednesday the permission for short selling in future deals for November counter.

According to an announcement issued by Karachi Stock Exchange (KSE), SECP said that for trading in future deals, no broker could sell more than five per cent of the free float of any scrip and the member will have to prove with his documents that the related shares were in his possession.

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Refrain from short selling this week

October 15, 2006
From DNA Money:
 The markets have seen higher traded volumes, partly because of the lower base effect (last week was shorter by a day) and higher trader interest on metal counters, both base and precious. The markets sensed a stabilisation on the crude oil front as the priceopen interesttraded volumes seem to indicate. Soft commodities (agri) saw a consolidation as the action was focused on hard assets. The trend is likely to persist this week as the festive season is likely to witness buoyancy on the precious metal counters. The positive economic outlook in the US markets is likely to keep base metals firm. I suggest abstinence from short sales this week, unless compelling evidence emerges to suggest such a strategy.

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Short-selling delayed to Jan 2007

October 13, 2006
From Business Times:
 BURSA Malaysia has delayed the launch of short-selling to January 2007 as it wants to address some operational concerns.

This is the second time in less than a month that Bursa Malaysia has sought to postpone regulated short-selling, following an eight- and-a-half-year ban.

Bursa Malaysia is operationally ready to launch short-selling and securities borrowing and lending (SBL) on October 16, chief executive Yusli Mohamed Yusoff said in a statement.

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Why Short-Selling Has Recently Become Harder

October 10, 2006
From SeekingAlpha:
 This is one of those periods when I don’t start off a phone conversation with a short-seller saying something like, “How goes it?” It’s the wrong thing to say, even if it’s also almost always a sign of a market rising too fast on its way to falling just as fast. None of which has much to do with anything unless you wonder what it was I was saying on CNBC’s Power Lunch yesterday about short-selling, which – according to those who do it -- has become noticeably harder in recent months.

The market’s rise clearly plays a role, but there’s more. In a letter to his own investors, Neil Barsky of the Alson Signature Funds – a long-short hedge fund – noted several other reasons.

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Bursa restarts regulated short-selling

October 3, 2006
From The Star Online:
 Bursa Malaysia Bhd will re-introduce regulated short-selling this month, starting initially with just 50 stocks, chief executive officer Yusli Mohamed Yusoff said.

Yusli said currently the exchange was conducting some final testing and, once completed, short-selling would be launched.

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San Francisco fund fined for short selling

September 29, 2006
From InvestmentNews.com:
 Graycort Financial, LLC, a San Francisco-based private investment fund, has agreed to pay a $100,000 penalty for engaging in short selling practices that netted more than $100,000 in unlawful trading profits.

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'Short' Selling Hits Record on Nasdaq

September 27, 2006
From The Los Angeles Times:
 Bearish bets on Nasdaq stocks reached a record high as of mid-September.

The number of Nasdaq shares sold "short" — stock borrowed and sold, usually in a bet that the price will decline — rose to 7.35 billion as of Sept. 15, up 1.2% from the level in mid-August, the Nasdaq Stock Market said Tuesday.

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Selling Spiderman Short

September 25, 2006
From TheStreet.com:
 After years of the sell side bearing the brunt of litigation by individual and institutional investors, short sellers have recently been the target of a number of lawsuits by public companies including Overstock.com, Biovail, and Fairfax Financial.

I have no idea as to the validity of the claims behind these three suits, but I do have a general view that the role of short-sellers on markets is a constructive one. As well, I have an interesting anecdote in which I was a target of a suit in the early 1990s that I want to relate, which makes me somewhat more sympathetic to the defendants and which could be instructive about the current environment surrounding the short-selling community .

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New online system for short selling

September 18, 2006
From Money Management.com.au:
 Online stockbroker Trader Dealer has launched an online stock borrowing system for investors wanting to short sell.

The fully automated system, claimed to be a first, allows investors to sell short, but the sale is processed as an ordinary trade.

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SEC Meets to Revisit Short-Sale Restrictions

September 18, 2006
From SmartPros:
 Stock-trading restrictions came under scrutiny Friday at the Securities and Exchange Commission, with experts debating whether the SEC should extend - or end - a 16-month experiment lifting short-sale restrictions on about 1,000 U.S. stocks.

SEC Chairman Christopher Cox said analysis of the experiment by economists and academics will help the SEC decide what to do once the short-selling pilot program ends next summer.

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The long and the short of investing in falling markets

September 2, 2006
From Guardian Unlimited:
 Short-selling: Private investors now get involved. Charlotte Moore spells out the facts ... and the risks.

Up, down, up again. That's the past few months on the Footsie - the UK's main stock market indicator. But experts warn against expecting an index move through 6,000 and into the blue sky beyond.

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Short-selling brings capital control to an end

August 31, 2006
From The Star Online:
 Regulated short-selling will become a reality in the near future, according to Bursa Malaysia.

Given the Malaysian stock market’s tendency to under perform, we should grab this opportunity to “sell high, buy low'' and make a killing in the market, right? Not so fast.

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Naked Justice?

August 29, 2006
From Forbes:
 Louisiana State Attorney General Charles Foti is trying to force UBS, the Wall Street investment bank, to turn over vast quantities of information on its trading, stock lending and other activities related to shares of software firm Sedona.

The Louisiana Department of Justice filed documents in a state court Tuesday to compel UBS to hand over the information in ten days.

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Record Activity In Short Selling Hits the Nasdaq

August 24, 2006
From The Wall Street Journal:
 Short-selling activity hit a record on the Nasdaq Stock Market during the latest monthly period, despite a rally in the technology sector.

For the period ended Aug. 15 , the number of short-selling positions not yet closed out at the Nasdaq -- so-called short interest -- rose 1.8% ...

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SEBI, RBI to meet soon to decide on short selling

August 15, 2006
From Business Standard:
 The move to allow institutional investors to short sell securities might be delayed as there are perceptible differences between market regulator SEBI and the Reserve Bank on whether to allow FII right from the start.

While SEBI wants to adopt a big bang approach by allowing all institutional investors to short sell right from the beginning, the Reserve Bank favours a gradual process starting with domestic institutional investors, official sources said.

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US court blocks Utah's curb on naked short selling

August 11, 2006
From Reuters:
 A federal court judge on Friday temporarily blocked a Utah law aimed at curbing a controversial investment practice known as naked short selling, in a move welcomed by Wall Street broker dealers.

The Securities Industry Association (SIA) and Utah's Securities Division agreed to a preliminary court injunction that blocks Utah's "fail to deliver" law, which was enacted in May and was to take effect Oct. 1.

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NYSE Probing Short Selling Of Bristol-Myers Stock-CNBC -2-

August 9, 2006
From Easy Bourse:
 Bristol-Myers complained to the exchange after seeing short interest in its shares nearly double between June 15 and July 15, just weeks before a barrage of negative news, CNBC reported.

The news included that of a Federal Bureau of Investigation raid in late July of the company's offices as part of a criminal investigation into an agreement the pharmaceutical company struck to delay the launch of a generic version of its best-selling drug, Plavix, the Sanofi-Aventis (SNY) blood-thinning drug that Bristol-Myers markets in the U.S.

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Sebi to issue policy statement on short selling

August 7, 2006
From The Business Standard:
 Market regulator Sebi would soon come out with a policy statement on short selling of shares.

"You will soon see a policy statement (on the issue)," M Damodaran, chairman of Sebi, said inaugurating a week-long independent directors' programme for senior officers of armed forces, organised by the Management Development Institute (MDI) here today.

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SIA disputes Utah short selling law

July 31, 2006
From InvestmentNews.com:
 The Securities Industry Association filed a lawsuit in federal court on Friday, challenging a Utah law that is aimed at regulating naked short selling of securities issued by Utah companies.

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Short-selling on Bursa set for Sept launch

July 28, 2006
From Business Times:
 BURSA Malaysia Bhd is on track to launch regulated short-selling in September, starting initially with just 50 stocks, its chief executive officer Yusli Mohamed Yusoff said.

"The framework has been completed and now we're tying up loose ends. We're looking at around 50 stocks to start with," he said without giving details

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FIs get short-selling leeway

July 20, 2006
From Business Standard:
 FIIs will have to wait till certain legal hassles are removed.

The finance ministry and the Securities and Exchange Board of India have decided to allow 'for the time being' only domestic financial institutions to short-sell and also enter into stock lending and borrowing.

Foreign institutional investors (FIIs) would have to wait till certain legal hassles are removed. While stock lending and borrowing is a pre-requisite for short-selling, it involves certain violations of the Foreign Exchange management Act (FEMA) in its present form. Therefore, Fema needs to be amended before FIIs are allowed to short-sell.

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Betting Stocks to Fall

July 19, 2006
From Newhouse News Service:
 The dispute had all the markings of a classic battle between a company and short sellers.

On one side was a well-known shipping firm complaining about speculators spreading rumors as part of a "dirty scheme" to depress its share price.

On the other, a group of businessmen who claimed the company had no one but itself to blame for its flagging shares. They pointed to the sinking of several vessels, substantial losses and excess inventory as reasons.

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Critics of short selling reserve extra venom for naked trades

July 16, 2006
From The Times:
 Naked short selling is either one of the greatest threats ever to face the financial markets or not that big a deal.

Naked short selling is a derivation -- in most cases an illegal one -- of regular short selling. In a normal short sale, the seller borrows stock and then sells it, hoping shares will decline so he or she can buy them back at a lower price.

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SEC expected to amend short-selling regulation: report

July 12, 2006
From Reuters:
 The Securities and Exchange Commission is expected on Wednesday to amend a regulation on short-selling, which would reduce the number of open short positions in stocks, The Wall Street Journal said.

The SEC's proposed changes to Regulation SHO comes in response to criticism of naked short-selling, when a trader never intends to borrow shares to cover a position, the newspaper said in a report on Wednesday.

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Sebi plan for short selling by investors

July 7, 2006
From Business Standard:
 The Securities and Exchange Board of India today decided to work on a plan to allow short selling by institutional investors and to support the same with a stock lending and borrowing system. Sebi is expected to shortly come out with details of a stock lending and borrowing programme.

Sebi Chairman M Damodaran after a board meeting here said “Issues of stock lending and borrowing as well as short selling by financial institutions have been a matter of concern for some time and we have addressed them at today's meeting.”

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SEC probes hedge fund over short selling

July 7, 2006
From CNN Money:
 HBK Investments, a Dallas-based hedge fund group with some $9 billion under management, is facing a regulatory probe into improper trading of private placement offerings, a source familiar with the matter said on Friday.

The Securities and Exchange Commission is focusing on short selling of a company called Plug Power (Charts) prior to a stock offering by the company in 2003, the source said. 

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Congress Weighs In On Shorts

June 27, 2006
From Forbes:
 Former U.S. Securities and Exchange Commission investigator Gary Aguirre is slated to testify at a hearing Wednesday as the Senate Judiciary Committee takes up the issue of hedge funds and manipulative short-selling.

Aguirre has complained to several members of Congress that he was fired last year from his job at the SEC for aggressively pursuing his investigation of possible insider trading at Pequot Capital Management, one of the largest and most prestigious hedge funds in the business. 

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Crying Foul In Short-Selling Land

June 21, 2006
From Forbes:
 An issue once relegated to conspiracy theorists and boiler-room insiders is about to get its 15 minutes in the sun when the Senate Judiciary Committee takes up naked short-selling in a hearing next Wednesday.

The hearing, which was postponed a week because of scheduling (and what was said to be overwhelming media interest), will focus on a brewing controversy that has already generated lawsuits against hedge funds, broker firms and research analysts alleging market manipulation in short-selling certain thinly traded stocks. 

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Who are the short sellers?

June 13, 2006
From MarketWatch:
 During Congressional hearings on short selling in 1991, Dennis Hastert, now speaker of the House, called it "blatant thuggery."

This year, the uproar surrounding shorts has reached a level unseen during the modern era, as a series of companies mount legal attacks over the allegedly underhand schemes that short sellers use to force down stock prices. 

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Overstock.com dukes it out with short sellers

June 12, 2006
From MSNBC:
 Most people buy stock hoping the price goes up, but hedge fund manager David Rocker was "shorting" shares of Utah-based Internet retailer Overstock.com Inc., betting the share price would decline.

Rocker's fund was making a legal bet that Overstock shares in 2004 were overvalued and due for a correction. Overstock.com CEO Patrick Byrne, however, sued, accusing New York-based Rocker Partners of collaborating on disparaging reports with the stock-research firm Gradient Analytics of Scottsdale, Ariz., while Rocker was shorting the shares.

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Is short selling a business profit?

May 7, 2006
From The Financial Express:
 Short selling means the sale of a security that the seller does not own at the time of trade. Sebi has released a discussion paper prepared by its Secondary Market Advisory Committee on the issue of short selling and securities lending.

Under the present regulations, investors such as banks and mutual funds are specifically prohibited from short selling. It is proposed that these investors be allowed to short sell and bring them at par with other retail investors. The recommendations of SMAC include complete prohibition on naked short sales.

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Primary dealers now allowed short selling in g-secs

May 4, 2006
From The Economic Times:
 Reserve Bank of India has allowed limited short-selling in government securities to primary dealers. The central bank has issued guidelines for trading in securities on a ‘when issued’ basis, which allows primary dealers to take short positions.

In terms of the guidelines issued today, ‘when issued’ (WI) trading is allowed only on existing securities that are being reissued. These transactions will be allowed only on the notified day of the issue and cease on the working day immediately preceding the issue.

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RBI against short selling by FIIs

May 2, 2006
From Business Standard:
 The Reserve Bank of India (RBI) has suggested that the Securities and Exchange Board of India (Sebi) should put on hold its proposal to permit institutional investors, especially foreign institutional investors (FIIs), to short sell equities in the secondary market.

In its reaction to a discussion paper circulated by the capital market watchdog on short selling, the banking regulator said the stock market was overheated and it might not be the right time to allow FIIs to short sell securities.

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Prosecutor: Lay's son was selling Enron stock short; Lay sold shares in 2001

April 27, 2006
From USA Today:
 The son of former Enron chairman Ken Lay was selling the company's stock short at a time when Lay and the company's then-CEO, Jeff Skilling, were railing against short-sellers and complaining they were driving the company's stock price down, a federal prosecutor said in court here this morning.

John Hueston, an Enron Task Force prosecutor who is cross-examining Lay, showed jurors Mark Lay's Schwab brokerage transaction report from March 2001 that indicated several short sales of Enron stock.

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Skilling made $15m short-selling rival

April 27, 2006
From The Independent:
 Jeffrey Skilling, the former chief executive of the collapsed energy giant Enron, made $15m (£8m) from bets against the share price of a rival energy company, it was revealed at his fraud trial yesterday.

Speaking during his fourth day on the witness stand, Mr Skilling sought to explain why he persistently sold Enron stock in the weeks after he left the company in August 2001.

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Firms sued for 'naked short selling'

April 21, 2006
From InvestmentNews.com:
 Hedge fund Quark Fund LLC is seeking class action status in an anti-trust lawsuit, claiming it was charged excessive fees for stock loan services that were not provided, according to published reports.

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China Plans to Allow Margin Trading, Short Selling (Update5)

April 17, 2006
From Bloomberg:
 China plans to let investors buy shares using borrowed money and speculate on price declines by selling stock they don't own for the first time, to tap the nation's $4 trillion of bank deposits and boost trading.

The China Securities Regulatory Commission may select five brokerages to start margin financing and short-selling services this year, according to a draft plan sent to the Shanghai and Shenzhen stock exchanges and obtained by Bloomberg News. The pilot program may be expanded to other companies later, it said.

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US hedge funds set to sue in short-selling row

April 13, 2006
From The Independent:
 Goldman Sachs, Morgan Stanley and other investment banks could face new legal claims running into