Exchange traded funds (ETFs) popularity may have helped make history this week, with a change in the market’s "short-selling" rules. The SEC eliminated the uptick rule, unanimously, that restricted short sales or bets against stocks when the stock was falling, a rule created after the crash of 1929. The rule was originally meant to prevent relentless selling, reports Spencer Jakab for The Wall Street Journal. The SEC found the rule was no longer applicable with electronic trading and tighter spreads. Besides that, some investors are short-selling on sectors using ETFs, which are free from the short-selling rule. With the advent of ETFs, the uptick rule was more of an annoyance or hindrance than a help to long and short traders.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.