InvestorQ : Is it true that the short selling curbs may not work after such a steep correction in the markets?
Debbie Mascarenhas made post

Is it true that the short selling curbs may not work after such a steep correction in the markets?

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Crowny Pinto answered.
1 year ago
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Do short selling restrictions work after the market has corrected 36%? Remember this is the overall correction and the damage in individual stocks is huge and may take years to repair. The question is whether short selling restrictions have come in too late to make a difference? Firstly, once the market is 36% down from the peak in a span of 45 trading sessions, you can be assured that most of the negative sentiments would be out of the market. That is almost like locking the stables after the horses have bolted. Now only thing left is for the VIX to stabilize because it is currently too high. Secondly, many of the sellers have been institutions and mutual and for them higher margins will hardly be relevant. The last phase in any market is driven by delivery selling and cutting of positions and these will be hardly impacted by these curbs. So, yes it has come in a bit too late in the day.

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