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The Interesting Case of a Short-Selling Ban

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Today's ban of short-selling on certain stocks in several European nations presents an interesting case worth studying for forex traders. The move to ban short-selling is intended to boost confidence in the region by preventing a massive loss of value for certain companies and banks. These moves have worked temporarily in the past, albeit with mixed success rates, but investors should look to the forex market if they wish to see true market adjustments.

The forex market, as volatile as it is, possesses no such framework through which to ban any behavior. Assets may be bought or sold freely, or taken off the market. The ability to impose a ban on certain behavior in the stock market simply does not exist in the forex market. This largely explains why many large investors turn to forex during times of market uncertainty: there is simply less official stipulations about what can and can't be done. This makes currencies and commodities move more naturally (even if they appear erratic). If you want to trade in a market which has fewer rules imposed on you, forex is where you should turn. Plain and simple.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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