Demise of long-short fund?

If there’s no shorting allowed, does this spelled the end for long-short fund? ???

pretty much

No. We just start calling them long-and-longer funds. Then no-one bothers to find out when the mirror pensioners are being robbed. Or that Enron is lying. Or that WorldCom is a bag’o’shite. We just stick our fingers in our ears and sing la-la-la.

shorting will not be banned, as it shouldn’t be. at worst we’ll adopt a temporary ban on shorting financials like the UK. i think mere enforcement of the naked short selling rules and possibly a temporary or permanent reinstitution of the uptick rule would do the trick. even if shorting is banned a long/short fund could express a short idea using inverse ETFs or perhaps put options.

You can still short futures contracts. That means you could still sort-of do the long short thing. Sort-of.

All this does is open up a new world of derivative contracts - one of the main problems that got us here in the first place.

Whaaa? Which new derivatives are those? The ones you can’t hedge anymore?

Where there’s a will there’s a way…

Cutting off short selling is completely bad for the equity derivatives market.