France, Italy, Spain and Belgium ban short-selling on the shares of banks and other financial companies
Short-selling is a purely speculative operation, in which the short sellers bet on the price drop of assets, and when they fall make huge profits. This operations increase the market volatility.
Short-sellers generally borrow shares or bonds, then sell this securities, and afterwards repurchase them when the stock down fall, making a difference.
“Naked” short-selling is when a trader sells financial instruments he has not yet borrowed.
The four countries banned all forms of short-selling.