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Update 2015-04-08-Regulation-SHO-Key-Points.md

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Government/2015-04-08-Regulation-SHO-Key-Points.md
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@ -252,3 +252,33 @@ Individual investors who have comments or information should feel free to contac
* * * * *
###### Modified: 4/8/2015
---
> **:information_source: Key Highlights and Takeaways** by [u/Meticulous-](https://www.reddit.com/user/Meticulous-)
>
> **What is short selling?**
>
> [Short selling](https://www.investopedia.com/terms/s/shortselling.asp) is selling a stock that **you do not own**.
>
> **Is short selling illegal?**
>
> Although the vast majority of short sales are legal, abusive short sale practices are illegal.
>
> **What is naked short selling?**
>
> [Naked shorting](https://www.investopedia.com/terms/n/nakedshorting.asp#:~:text=Naked%20shorting%20is%20the%20illegal,before%20they%20sell%20it%20short.) is an illegal practice of short selling shares that **do not exist**. This causes a failure to deliver (FTD).
>
> **What is a Failure to Deliver (FTD)?**
>
> A FTD results from either a short or long sale. FTDs can occur due to
> 1. Human or mechanical errors such as processing delays
> 2. Buyers not having enough cash
> 3. Sellers not having the securities
>
> **What is the Regulation SHO?**
>
> [Regulation SHO](https://www.investopedia.com/terms/r/regsho.asp) was a rule created by the SEC in 2005 to govern short selling.
>
> In 2010, the Regulation SHO was amended to stop short selling on a security when prices have decreased by 10% or more during the trading day.