Hedgefundamentals: An Introduction to Short Selling

Regulators have long recognized the critical role short selling plays in well-functioning capital markets – increasing transparency, contributing to price discovery, and providing liquidity. The strategy also generates revenue for institutional investors that hold the securities in their portfolios. These investors typically lend the securities to managers as part of the short sale and get the benefit of the interest payments. That’s a tangible monetary benefit that provides real value to foundations, colleges, and pension plans in states across the country.

The below video highlights these benefits and the current robust regulatory framework that governs short sales.

You can also read the MFA’s white paper on short selling in its entirety by clicking the image below.