Short selling

Short selling is selling borrowed securities in the expectation of buying them back cheaper. It is lawful, it improves price discovery, and it is regularly and incorrectly described as manipulation by the issuers it targets.

instruments and markets · updated 2026-09-08

Where does short selling come up?

This term is used in the following manipulation techniques, each explained in full on its own page.

• The naked short selling debate — Naked short selling is selling short without having borrowed the security or arranged to borrow it, which is restricted by Regulation SHO and whose real-world scale and price impact remain genuinely contested.
• Short and distort — Short and distort is taking a short position and then publishing false or materially misleading negative claims about the issuer, in order to drive the price down and cover cheaply.

Enforcement actions involving these techniques

See also

• Naked short selling — Naked short selling is selling short without having borrowed the security or arranged to borrow it. Regulation SHO restricts it an…
• Short squeeze — A short squeeze is a sharp price rise driven by short sellers buying to close positions, which pushes the price higher and forces …

Terms that refer here

Free rider problem · Naked short selling · Securities lending · Short and distort · Short squeeze

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