Short Selling on the New York Stock Exchange and the Effects of the Uptick Rule

Gordon J. Alexander, Mark A. Peterson

Research output: Contribution to journalArticlepeer-review

30 Scopus citations

Abstract

We examine the impact of Rule 10a-1, the Uptick Rule, on short-sell orders sent to the NYSE. The principal finding is that the execution quality of short-sell orders is adversely affected by the Uptick Rule, even when stocks are trading in advancing markets. This is inconsistent with one of the three stated objectives of the rule, i.e., to allow relatively unrestricted short selling when a firm's stock is advancing so that the rule does not affect price discovery during such times. Journal of Economic Literature Classification Numbers: G18, K22

Original languageEnglish (US)
Pages (from-to)90-116
Number of pages27
JournalJournal of Financial Intermediation
Volume8
Issue number1-2
DOIs
StatePublished - Jan 1999

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