The Uptick Rule and Short-Selling Strategies
The Security and Exchange Commission revoked the uptick rule in July 2007. The revocation of the uptick rule provides us with a unique setting to investigate the impact of short-sale constraints on various short-selling strategies in a controlled environment. Comparing short-selling behaviors for uptick-rule restricted and unrestricted stocks during the pre- and post-revocation periods, we find that contrarian short selling and voluntary-liquidity short selling are more profound in uptick-rule-restricted stocks than in unrestricted stock and that market trend chasing short selling is less profound in uptick-rule-restricted stocks than in unrestricted stocks. Our results also show that the uptick rule has no impact on risk-bearing short-selling strategies.
|Date of creation:||Jan 2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.mtsu.edu/~berc/working/Economics_Working_Papers.html|
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