Jun Gao

Apr 20, 2020

1 min read

Short on S&P 500

Q: what is the security being bet against?

A: the SPDR S&P 500 Trust

Q: what is the short’s motivation?

A: Many investors who sell shares short have decided that the ability to hedge their portfolios — or simply bet on a selloff — is wise.

Q: why do people push the regulators to curb short selling?

A: “The increase in bets against the market coincides with a push in other countries to temporarily curb short selling. At times of heightened volatility, critics often argue that the practice exacerbates downward pressure on stock prices. But Jay Clayton, the chairman of the Securities and Exchange Commission, has argued short selling is needed to facilitate ordinary market trading.”