In a previous report I mentioned the usefulness of short selling; selling borrowed securities, in the hope of buying back the borrowed security at a lower price in the future.
Without short selling, markets would become overvalued and would not be priced as rationally as they generally are.
However, during financial meltdowns or other emergencies which may affect markets from properly functioning, it may be necessary to temporarily stop such trading.
The SEC has placed restrictions on the use of short selling after a security is off, for example, 10% on the day. Policing is difficult with the rise of lightning-fast trading computers. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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