DEFINITION of 'Short Exempt'

A short sale order in which the uptick rule doesn't apply to the trade. The trade can go through on a down tick, or a downward move in price, where a traditional short order trade has to be done on an uptick, or upward move in price.

BREAKING DOWN 'Short Exempt'

Any order that goes through needs to be marked long, short or short exempt, with short and short exempt being marked with SSH and SSE, respectively. The uptick rule is in place to prevent short sellers from unduly putting downward pressure on a stock with heavy selling volume.

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RELATED FAQS
  1. What kinds of restrictions does the SEC put on short selling?

    Learn about the rules and regulations on short selling enforced by the U.S. Securities and Exchange Commission, or SEC, including ... Read Answer >>
  2. Why is the Uptick Volume important for traders and analysts?

    Find out why technical analysts and traders keep track of uptick volume to better assess the momentum of a stock's price ... Read Answer >>
  3. What is the Uptick Volume formula and how is it calculated?

    Learn more about uptick volume, a measurement of the number of trades that take place during a time when an asset's price ... Read Answer >>
  4. What is a common strategy traders implement when using the Uptick Volume?

    Learn how traders use uptick and downtick volume with VWAP cross to identify trends and momentum and identify points of big ... Read Answer >>
  5. What are the best technical indicators to complement the Uptick Volume?

    See how uptick volume can be used to help confirm price trends from nearly every trend-following indicator, especially when ... Read Answer >>
  6. Can you short sell ETFs?

    ETFs (an acronym for exchange-traded funds) are treated like stock on exchanges; as such, they are also allowed to be sold ... Read Answer >>
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