NEW YORK, Aug. 14 (UPI) -- A U.S. regulator's expired curb on a short-selling strategy left investors wondering if the temporary rule did any good, analysts said.
The Securities Exchange Commission banned "naked" short sales of 19 financial stocks on July 21.
Traders profit from short sales when stocks decline. In "naked" short sales, traders don't borrow the stocks from a lender, which they would do in a standard short sale, USA Today reported Thursday.
Financial firms suffered big losses Wednesday, when the ban was lifted, causing some to feel the ban had worked. "If (the SEC) wanted to protect these companies artificially, it served its purpose," Eric Fitzwater at SNL Financial told the newspaper.
But, short-selling volumes fell only slightly, down 0.2 percent, from July 10-28 and 4.4 percent among the nine U.S. financial firms affected by the ban, the newspaper reported.
Larger troubles in credit markets continued to affect financial firms during the ban, analysts said to USA Today.
Problems in the industry are "far from over" said Richard Bernstein, an investment strategist at Merrill Lynch.
Still, some thought the ban had long-range implications. "Forever the landscape has changed for short sellers," Dylan Wetherill of ShortSqueeze.com tld USA Today.
