Brake on Earning from Virus Panic: British Market Watchdog Prohibits Short Selling

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The British market watchdog temporarily bans the possibility of short selling, with investors speculating on a share price fall, the Financial Conduct Authority (FCA) announced.

 

Stock markets have plummeted in recent days due to fears of the coronavirus.

The measure will take effect immediately. According to the Netherlands Authority for the Financial Markets (AFM), such a ban is not yet in force.

The last time a ban on short-selling was imposed in the Netherlands was during the financial crisis in 2008.

Speculating on further price falls can undoubtedly cause even more uncertainty.

Investors who go short sell shares they borrowed from the owner. They then hope for a loss of price to buy back the shares cheaply and earn the profit.

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