Short sale refers to the sale of listed securities that are neither owned nor borrowed. The sale of listed securities
that are not possessed is prohibited to stabilize settlement.
Note, however, that short sale is allowed under any of the following cases since they are not considered to be
The sale is carried out prior to the date of settlement within the corresponding number of listed securities for which
the purchase contract was signed in the market.
Shares are sold through the exercise of right with conversion bond/exchange bond/bond with warrant, etc.,
paid-in-capital increase, increase in capital stock without consideration, dividend of share, etc.; the corresponding
securities can be settled as they are listed.
The settlement can be made by the date of settlement under any of the following cases:
Sale of listed securities that have been kept in other securities depositories or verified to be owned in other ways
Sale of ETF to be received upon additional issuance
Sale of listed securities to be received upon the request for resale of ETF
Sale of listed securities to be acquired upon the termination of the depositary contract pursuant to entrusted
Sale of listed securities confirmed to be returned among the listed securities that have been leased
Sale of listed securities that will be delivered through off-board transactions and contract
Sale of listed entrusted securities to be deposited and acquired
Sale during regular trading hours within the corresponding scope of quantity after the agreement with the truster
(consignor) to buy after trading hours
Limit to the bid price for covered short selling
The bid price for covered short selling must be higher than the present price to prevent the share price from plummeting
as a result of covered short selling. Note however, that the present price can be used as bid price if the present price
is propelled upward.
Nonetheless, no price cap is imposed for index arbitrage, stock arbitrage, ETF arbitrage, depositary receipt arbitrage,
ETF sale, and share liquidity provision when the supplier of liquidity of share warrant/ETF and market organizer of
derivative commodities sell the basic stock certificate to hedge the risk.
Contents Manager :
KOSDAQ Market Division/Trading Rules & Regulations/Keun-Hwa Park
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