Short Selling: The Long & Short of It
October 6th, 2009
2 comments
The battle lines are drawn; however, this one looks like it might end in a
stalemate.
Under pressure from Congress, the SEC has proposed various rules to restrict
short selling, a legitimate investment strategy whereby investors profit on
a stock’s decline. In a short sale, an investor borrows stock and sells
it in the hope that its price will fall. If the price does drop, the seller
profits by “covering” or buying the stock back at the lower price.