Institutional Short Selling - Aussie Stock Forums

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  1. #1

    Default Institutional Short Selling

    Chatting with a friend on another non-stock related forum,

    Are funds and such able to take short positions in small/micro cap companies?

    Legal or illegal....

    if so, how?

    if not, why not?

  2. #2
    white swans need love too Timmy's Avatar
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    Sep 2007
    Between the lines

    Default Re: Institutional Short Selling

    I am not speaking with any specific knowledge of the subject, so someone better informed than me may be able to comment. The rules for what securities can and can't be short sold on the ASX are laid down by the ASX (easy to find with a search of the ASX website), and there are minimum capitalisation requirements for a security to be short sold (i.e. can't short sell vry small-cap companies).

    Having said that, many CFD providers manage to allow short sales of CFDs over securities that otherwise could not be short sold. Again, no expert on how they achieve this ... but I can use my imagination to figure out how it could be easily done. Whether institutions take advantage of the capability I don't know.

    Actually, doesn't seem I have an answer for you at all .... but hopefully we can get some more input.
    The contents of this post were tested, ruthlessly, on small, cute, furry animals. Most of them were fatally harmed. Hence, if this post causes irritation, please discontinue reading immediately.

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