Short-sale rule

Short-sale rule

An SEC rule requiring that short sales be made only in a market that is moving upward; this means either on an uptick from the last sale, or showing no downward movement.

Short Sale Rule

An SEC regulation in effect from 1938 until 2007 forbidding short sales on a stock after a downward tick in its transaction price. In other words, if the price of a stock decreased in the trade immediately prior to a transaction, that transaction is not allowed to be a short sale. Short sales were only permitted after an uptick or a zero-plus tick. This rule was instituted to prevent panic selling in an era when lack of computerization made markets more easily to manipulate. With the increased digitalization of stock markets, this rule was no longer necessary.
References in periodicals archive ?
Weisberg notes that the short-sale rule was put in place after the stock market crash of 1929.
com/ , today commented on recent regulatory action relating to short-sale rules.
According to the Dow Jones Newswire, The Securities and Exchange Commission (SEC) voted Wednesday (October 22, 2003) to seek comment on a controversial proposal to overhaul short-sale rules.
who has thirty-six years of investment banking experience, is pleased with the implementation of the Manning and Short-Sale rules recently effected.