SSR

September 19, 2023

The "SSR" designation on NMS securities (those securities listed on a US stock exchange) stands for "Short Sale Restriction." Specifically, SSR is an SEC Rule referred to as the "Alternative Uptick Rule" or "Short Sale Circuit Breaker Rule." This rule is designed to restrict short selling of individual stocks that have experienced a significant decline in price during a single trading session.  

Here's how the SSR works:  

  • Trigger: The SSR is triggered when a stock's price falls by a specified percentage (usually 10% or more) from its previous day's closing price. When this threshold is reached, the SSR is activated for that particular stock.  
  • Restrictions: Once the SSR is in effect for a stock, short selling is allowed, but it must be executed at a price that is above the stock's current national best bid (the highest current displayed buy price in the market). In other words, short sales cannot be executed at a price equal to or below the stock's current bid.  
  • Duration: The SSR remains in effect for the remainder of the trading day in which it was triggered, as well as the following trading day. This is intended to provide a cooling-off period for the stock and to reduce short-selling pressure during a period of rapid price decline.  

  

The SSR is one of the regulatory mechanisms implemented by stock exchanges to promote market stability and prevent aggressive short selling that could potentially exacerbate price declines. It is like the circuit breakers and short sale restrictions applied in other exchanges and markets.  

Investors and traders should be aware of SSR rules when trading, as they can impact the execution of short sale orders for specific stocks during times of significant price volatility. These rules are designed to strike a balance between allowing short selling as a trading strategy and preventing potential market manipulation or excessive downward pressure on stock prices.  

This post is for informational and educational purposes only.  It is not to be construed as investment advice, or a recommendation of any security, strategy, or account type.  Investors must be sure to understand all risks involved with any trading strategy, including commission costs, before placing any trade.   Inclusion of specific security names in this blog post does not constitute a recommendation from us to buy, sell, or hold.  
Further, this post is not an offer or solicitation for brokerage services, investment advisory services, or other products or services in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the securities laws or other local laws and regulations of that jurisdiction.  The provision of the services referred to in this material is subject to relevant local regulation and practice, and not all the services described may be available in your particular jurisdiction.  Any investment decisions made by an investor shall be based solely based on the investor's independent analysis taking into consideration their financial circumstances, investment objectives and risk tolerance.  Although the information has been produced from sources believed to be reliable, no warranty express or implied is made regarding its accuracy, adequacy, completeness, legality, reliability, or usefulness.

We are not affiliated with any third-parties or service providers mentioned in this post. Past performance of a security or strategy does not guarantee future results or success. 

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