Italy’s securities market regulator, Consob, on Friday extended a ban on the short selling of bank and insurance stocks until January 15 in order to limit volatility on the market.
Consob first imposed the ban on August 12 along with a number of other European countries when huge tensions hit Eurozone securities markets, and renewed it in September through November 11.
Short selling is defined as when a trader borrows shares that he expects to see fall, sells them, then buys them back when the price is lower to allow him to take a profit before settling the loan.
Critics deride the practice as speculation and charge that it adds to market volatility, while market participants say it improves liquidity.
Milan, Nov 11, 2011 (AFP)
