Short Selling in Indonesia

by Guinandra Jatikusumo


…is allowed but strictly regulated, thanks to the 2008 subprime mortgage crisis. A customer needs to have a minimum of IDR 200,000,000 (approximately USD 20,000) in their stock account to have the privilege of hedging their stock investments when the market plunges. Download the regulation here: Short Selling in Indonesia (in Bahasa Indonesia).

Most active, technical traders I’ve talked to play the one and only strategy to gain profit: capital gains from buying low and selling high. What do they do when the stock declines as Chairman Bernanke recently announced his plan to decelerate the Fed’s quantitative easing program and as the country is in a political turmoil as the price of fuel increases? Simply hope that the market would bounce back again.

Relevant update: Greece is planning on lifting its short-selling ban. [Article].