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Sunday, October 26, 2008

Why ban short selling?

I have an article in Financial Express on this subject.


  1. "The second event would take place in Singapore. The Singapore Exchange (SGX) would bless their good fortune, and launch stock futures trading on Indian stocks. The optimists and pessimists would then take their business to Singapore. "

    That exactly is what the policymakers thinking:"Good riddance to a bad rubbish"
    And I'll be laughing belly up, when SGX moves up in liquidity in the global market list. Japanese have a word for it: Kamikaze. Period

  2. Ajay,

    SEBI needs to develop a vibrant securities lending program. That will bring down the fess charged by Index funds. In the U.S. index funds like Vanguard earn about 30-35 bps from participating in the stock lending program, that enables them to offer index funds at 10-15 bps of the AUM.

  3. Ajay,

    We need to introduce reverse ETF's which will enable retail investors to bet on stock market declines without resorting to shorting in the cash market. Look at the list of reverse ETF's in the market in the U.S. right now.

    In the U.S. we have the 2x and the 3x reverse ETF's though I do not recommend those products for retail investors.


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