there are fewer opportunities to execute a short sale making it relatively
harder to short a stock. In fact, the uptick rule is meant to curb the impact
of attempts by short sellers to drive a stock’s price down through aggressive
selling. We will conclude this chapter with a few remarks on short selling.
Specifying the Order
The first step to the successful execution of an intended trade is unambigu-
ous specification. In the case of a single stock execution, the order must at a
minimum specify clearly the ticker, the trade direction, and the trade quan-
tity. This is essentially what is known as the simple market order. Additional
constraints related to the price at which the trade may be executed are added
to this basic instruction and specified in what is well known as limit orders
orstop orders.
In the case of a paired transaction, we need to specify the bidder and tar-
get tickers, and the trade direction and trade quantity for each of them. The
other constraints specified include the spread to be captured between the
152 RISK ARBITRAGE PAIRS