Uptick Rule

The uptick rule, which put restrictions on short selling, was officially eliminated on July 6, 2007. This rule only permitted short selling to occur when the last price movement of the stock was positive, the so-called uptick. You could not short it on a downtick. The removal of this restriction makes it easier for the hedge funds to take advantage of downward price movements.

There were 473 stocks listed on the NYSE and Nasdaq Regulation SHO Threshold Securities List as of July 2007. 140 no longer trade. The other 333 companies are down an average of 22% since the elimination of the uptick rule.