Spain's stock market extends short selling ban

AP News
Posted: Nov 01, 2012 1:28 PM
Spain's stock market extends short selling ban

MADRID (AP) — Spain's financial regulator has extended for three months a ban on short selling of stocks that aims to decrease volatility in markets.

The CNMV regulator says in a statement Thursday that "due to the existence of exceptional circumstances" it is going "to impose, effective immediately and for a period of 3 months, restrictions on short selling and similar transactions."

It first adopted the ban in July.

In a short sale, investors sell stock they do not own, betting that they can buy it back at a lower price. The investor seeks a profit by betting that the price of certain shares will fall.

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Short selling of shares has been blamed for worsening market volatility during the financial crisis. Italy also banned short selling in July.