Abu Dhabi Exchange Launches Covered Short Selling

SourceAl Bawaba
SectorFinancial Markets
CountryUnited Arab Emirates

By doing so, it will attract a new segment of specialised and experienced investors, driving both liquidity and trading volumes. The launch of CSS comes after the Securities and Commodities Authority (SCA) approved ADX’s covered short selling guidelines, which enable investors to sell borrowed securities or financial securities pledged for return to lenders. Covered short selling involves investors selling shares in a specific company that they do not own at the time, but which they believe to be over-valued, which creates an obligation to buy them in the future. This can be done by borrowing the shares they wish to sell from a brokerage company and then selling them directly in the market in anticipation of a decrease in the share price. If the share price subsequently falls, the investor can buy back ...read more...