Germany to ban some short selling: reports [View All]

Source: marketwatch

NEW YORK (MarketWatch) -- Germany will ban naked short-selling of some company shares and European government bonds, according to Reuters. Other reports said the ban will apply to certain credit default swaps as well, analysts said Tuesday. A lawmaker with the ruling Christian Democratic Union told Dow Jones Newswires that Chancellor Angela Merkel will announce the plan in her speech to the lower house of parliament Wednesday morning. In a regular short sale, the investor borrows the stock, sells it, and then repays the borrowed stock. The trader hopes to buy it at a cheaper price. In a naked short sale, the short-seller never borrows the stock in the first place.

Read more: http://www.marketwatch.com/story/germany-to-ban-some-short-selling-reports-2010-05-18-1452350