Inspiration & knowledge

Investor Blog

Ban on short selling

Belgium, France, Italy and Spain

3 minutes
FRI 03-04-2020

Due to the continued exceptional market conditions, several supervisors in Belgium, France, Italy, and Spain decided to enact a ban on short-selling for a large number of shares in their local markets. The definition of short selling is ‘’taking a position which allows you to speculate on a fall. With this temporary ban, supervisors want to prevent the probability of a significant drop in market prices due to speculation and improve the stability of the financial market.


What does this mean for you?

Existing short positions in derivatives
If you are in short positions, you can hold them. The existing short positions don’t have to be closed.

Examples:
A long-put in the portfolio without underlying stocks in possession 
A short call in the portfolio without underlying stocks in possession


New positions in derivatives
It is not allowed to open/buy new short positions.

Examples:
Buying a put-option, eg. the AB Inbev without having underlying stocks in possession ( at which 1 put protects 100 stocks, and 2 puts protect 200 stocks, etc…..)
Writing of a call-option on, for example, the AB InBev without having the underlying shares held (at which 1 call is hedged through 100 shares, and 2 calls by 200 shares)
Buying a put-option, eg. on the AB Inbev without having a written put-option on the AB Inbev
Writing a call-option, eg. on the AB Inbev without having a long call-option on the AB Inbev 


Turbo’s with other providers
Various turbo providers provide only the bid price. For the remaining part of the turbo's, shorts with the underlying assets to which this prohibition applies, are only possible for positions to be closed.


Overview per country
The national supervisors in Europe, have various ways of managing his ban on short selling. In the given overview below you will be provided with more specific information about how this ban is applied in each individual country. Additionally you will find the underlying values that are also part of the ban.

Belgium   

France 

Italy  

Spain

Listen to this!

These are turbulent times on the stock markets. What do you do? Buy? Sell? Panic? Start investing now?

Kaspar Huijsman explains the actual situation, pitfalls and opportunities during interviews for Talk Radio Europe.

23 March 2020

31 March 2020

Turbulent times on the markets

Start investing

Investing with BinckBank allows you the use of user-friendly platforms and access to all relevant stock markets. Besides we provide you with inspiration and knowledge via the BinckBank Investment Academy.

Agenda

Date Subject Place
All events & sign up