The UK financial regulator has suspended short selling of some London Stock Exchange listed stocks such as Juventus Football Club, Ferrari, among other Italian and Spanish stocks.
“Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short sellers bet on, and profit from, a drop in a security’s price.” – Investopedia
The decision follows a similar move by the Italian and Spanish regulators who on Thursday evening banned short selling on the Milan and Madrid Stock Exchanges as stocks recorded huge price drops.
The ban on short selling will be effective until the end of business on Friday 13th 2020.
The BBC noted ” Short selling is speculation that the price of a stock will go down, and if there are more short sellers than buyers, the price will be pushed down.”
“Firms including football clubs Lazio and Juventus were on the list, as well as luxury car manufacturer Ferrari, ” added the UK broadcaster.
