SHORT selling has always had an image problem. The investment strategy – which involves selling a borrowed asset expecting its price to fall, then buying and returning it – is often associated with callous bankers gaining from others’ misfortune. The 2015 Hollywood film The Big Short, which documents the billions some traders amassed by betting against the US housing market in the run-up to the global financial crisis, brought the practice to wider consciousness.

Alongside the moral qualms, critics claim “shorting” stokes panic, crashes stock prices and punishes the public. The authorities have frequently responded by clamping down on the practice – the latest attempt comes from South Korea.

This month, the Financial Services Commission (FSC) in Seoul placed a ban on short selling listed stocks until June 2024. Sceptics suggest that it is a political effort to appease local retail investors – who have become a dominant force in the stock market – and to cast traders as the “bogeyman” for low prices ahead of elections in April. The FSC says that it is actually trying to root out more egregious forms of short selling.