• Jan
  • 30
  • 2007
  • 5:26 PM

Q&A: How are short sales handled?

By: Ray Pellecchia
File Under: NYSE, NYSE

A reader writes in response to Nitty-Gritty of Phase IV Summed Up Tight :

Hi. I'm not clear on hybrid short sales order default destination. I understand that:

1. market order defaults to the floor (unless marked "NX")
2. limit orders default to NX
3. What about short sales? What is the default execution destination?

Could you please answer question #3 on short sales and confirm (or correct) #1 and #2?

Thanks in advance for your help,

Joe

Joe -- In the order you asked:

1) Market orders are automatically executed. They need no longer be marked "NX."

2) Marketable limit orders are automatically executed; non-marketable limit orders are posted on the limit-order book.

3) There is no special handling for short orders; they are handled as above.

Hope that clears it up, Joe. Thanks for writing!

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