Philippine Stock Exchange Makes Modifications in Short Selling

Philippine Stock Exchange or the PSEi will be disseminating copies of the guidelines for short selling during the middle part of the year. This will definitely impact the trading system as they will introduce a new platform for PSE short selling.

Eligible securities will be released by the PSE; these are the ones that can be short sold. According to PSE President and CEO Hans Sicat, “This will be the most liquid of the most liquid. It will be part of the PSEi [the benchmark index] to start off. There’s a lot of interest. I guess they’re also waiting for us to say ‘we’re launching.’ The software for this will be part of the new trading engine.”

Additionally, he also said: “We have to start off with a small universe. The reason to start with a small universe is for risk management. More important, you want the market to start practicing with a few options. So the most liquid is obviously the best.”

What is Short Selling?short-sell

Stocks Short Selling is the mechanism of selling security which is not owned by the seller, however, it is a sale in a given time, which was promised to be delivered. Currently, the PSE does not implement guidelines in short selling however, the said mechanism is allowed as per the Securities and Regulation Code.

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