Publication Type
Journal Article
Version
acceptedVersion
Publication Date
6-2013
Abstract
In September 2008, the U.S. Securities and Exchange Commission (SEC) temporarily banned most short sales in nearly 1,000 financial stocks. We examine the ban's effect on market quality, shorting activity, the aggressiveness of short sellers, and stock prices. The ban's effects are concentrated in larger stocks; there is little effect on firms in the lower half of the size distribution. Although shorting activity drops by about 77% in large-cap stocks, stock prices appear unaffected by the ban. All but the smallest quartile of firms subject to the ban suffer a severe degradation in market quality.
Keywords
short sales, price efficiency, option markets, liquidity, uncertainty, quality, world, time, bear
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Review of Financial Studies
Volume
26
Issue
6
First Page
1363
Last Page
1400
ISSN
0893-9454
Identifier
10.1093/rfs/hht017
Publisher
Oxford University Press
Citation
BOEHMER, Ekkehart; JONES, Charles M.; and ZHANG, Xiaoyan.
Shackling short sellers: The 2008 shorting ban. (2013). Review of Financial Studies. 26, (6), 1363-1400.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4687
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1093/rfs/hht017
Comments
Selected “Best Paper” at the 2009 University of Michigan / Mitsui conference on “Financial (In) Stability.”