After seventy years with no changes to short sale regulation, the United States Securities and Exchange Commission intervened three times with regulatory action from July 2007 through October 2008. The Commission first loosened restrictions on short sales by repealing the “Uptick Rule” in...

We examine the breadth-return relationship and the effect of stock price manipulation on it. Using data from the Chinese stock market, we first empirically find a significantly negative breadth-return relationship. Moreover, we conduct a long-short trading strategy based on the breadth change,...

The purpose of this paper is to study the closed-end fund discount in Miller's (1977) framework. Miller's theory states that in the simultaneous presence of (1) short sale restrictions and (2) dispersion of investors' opinions, securities become overvalued. We show that discounts of...

During financial crises, financial market regulators often restrict short-selling to support prices and curb volatility. However, evidence suggests that short-selling bans during the turmoil in financial markets in 2007--2009 failed to achieve regulators' goals. We analyze a model of costly...