Overview of Short Selling in Securities: Analyzing Its Concept, Characteristics, Role, and Legal Framework

With the growth of short selling activities, there is there is limited research on its impact on the market and investors. This study investigates the short selling process and its role in price correction and enhancing liquidity, and providing risk management for investors. Data from markets in Vietnam, the US, and Singapore were collected for analysis. The findings reveal that short selling plays a critical role in stabilizing stock prices, filtering out underperforming companies, and increasing market liquidity. However, this practice also presents significant risks to investors and can lead to considerable market volatility if not effectively regulated. This underscores the need for proper oversight and regulatory measures to ensure market stability.