The Gateway to Algorithmic and Automated Trading

Short Selling and Risky Margin

Published in Automated Trader Magazine Issue 11 Q4 2008

Since Automated Trader’s Q3 issue hit your desktops, we have been living in interesting times. In our conversations with you in the last few weeks before going to press, two things have been top of your agendas:

  • The short selling ban on financial stocks
  • The security of margin deposits in the event of a clearer’s failure.

This issue’s First People feature showcases some of these conversations.

The short selling ban

Miles Kumaresan, Head of Algorithmic Trading, TransMarket Group

It is a nuisance. It is also a false intervention, because the markets are not going down simply because of short sellers - they are going down because the fundamentals are poor. All the ban is doing is putting a small temporary brake on this situation; rather like trying to close the gate on a huge dam.

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