Everyone knows you should buy low and sell high. But short sellers hope to profit by selling high and buying low. Short sellers borrow a stock and pay interest on it, usually from a broker-dealer, and sell it in the hope that stock will drop and the seller can then buy it back, hand it over to the owner, and keep the difference between the high sell price and lower buy price. But short selling, along with any other kind of selling, can cause a stock to drop. Solution from the free market gurus? Protect the investment banks! Eliminate short selling:
The SEC, which had convened a late-night commission meeting Thursday to consider several items, said in a statement early Friday morning it is halting short selling on 799 financial stocks. The ban, which is effective immediately, is set to last for 10 days, but could be extended for up to 30 days.