Dictionary of Finance and Investment Terms: short exempt
short exempt
an order to sell short that is exempt from the short-sale rule and its tick test. Term has traditionally applied to special trading situations, such as that where the owners of a convertible security trading at parity can sell the equivalent amount of common short on a minus tick, assuming they have the firm intention to convert. Under the new Regulation SHO, a list of stocks has been designated as exempt from short sales rules during a one-year pilot program designed to determine whether the short-sale rules should be eliminated permanently.
