RiskPicksWhat is SSR?
SSR (Short Sale Restriction), also called the "uptick rule" or Rule 201, is triggered when a stock drops 10% or more from the previous day's closing price. Once SSR is active, short sellers can only short the stock on an uptick (when the price is moving up), not on a downtick. This stays in effect for the remainder of the trading day and the entire next trading day.
How it affects trading
- Shorts cannot pile on: in a sharp selloff, SSR prevents shorts from aggressively hitting the bid and accelerating the decline
- Bounces can be stronger: with short selling restricted, buying pressure faces less opposition, making bounces more likely to hold
- Not a floor: SSR does not prevent the stock from going down. Existing holders can still sell. It just prevents new short positions from being opened on downticks
Why short squeeze traders watch SSR
When a heavily shorted stock triggers SSR, short sellers cannot easily add to their positions on the way down. If buying pressure picks up (from retail, institutional buyers, or short covering), the restricted shorting can contribute to a stronger squeeze because bears cannot fight back as effectively.
SSR is triggered automatically by the exchange. You can check whether a stock is on the SSR list through your broker's platform or on the exchange's website. It resets at the end of the second trading day.