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Short Exempt

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Short exempt
Used for listed equity securities. A special trading situation where a short sale is allowed on a minustick. The owners of a convertible trading at parity can sell the equivalent amount of common short on a minus tick, assuming they have the firm intention to convert.

Short Exempt
A short sale exempt from the short sale rule, which was a rule requiring that short sales occur only after upticks or zero plus-ticks. Convertible securities were sometimes short exempt. This is no longer important as the short sale rule is not in effect anymore.

short exempt
A short sale exempt from the rule that short sales must occur on upticks. Short exempts include some arbitrage transactions. Owning a security that will be converted into the common stock that will be sold allows a short exempt sale.


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