Can you short below the reference price in Taiwan? Current rule & exceptions
Last updated: 2026-08-19
Yes, generally — since 2012-09-23, the TWSE relaxed the old "no short selling below the reference price" rule for margin-eligible stocks. The one exception: if the stock closed at limit-down the previous trading day, the restriction re-applies that day. Not investment advice.
What "reference price" (平盤) means
"平盤" (the reference price) is the previous trading day's closing price. "Below the reference price" (平盤下 / 跌破平盤) means placing a sell order at a price lower than that closing price. The rule in question historically restricted short sales — both margin short selling (融券賣出) and securities-lending short sales (借券賣出) — from being placed at prices below this reference level.
The current rule: relaxed since 2012
Since 2012-09-23, the TWSE has allowed margin short sales and securities-lending short sales on eligible stocks to be placed below the reference price — the old blanket ban no longer applies in normal conditions. This is a common source of outdated information: news coverage of temporary, emergency-only short-selling curbs (imposed during specific market-stress episodes and later lifted) is sometimes mistaken for the everyday standing rule, which has in fact been the more permissive one since 2012.
The exception: previous-day limit-down
If a stock's previous trading day closed at the daily lower price limit (跌停) — or had no closing trade but its lowest ask at the close was at the limit-down price — the below-reference-price restriction re-applies to that stock for the current trading day. This is a targeted anti-pile-on measure for stocks already under acute selling pressure, not a market-wide rule.
Who is fully exempt: ETFs, and broker/futures firm hedging
Index ETFs, and margin/securities-lending short sales by securities and futures firms for their own business hedging needs, are exempt from both the below-reference-price restriction and the limit-down exception entirely — they can be shorted below the reference price even on a day the underlying was at limit-down the day before.
Scope: only stocks eligible for margin trading
This entire rule set only applies to stocks the exchange has designated as eligible for margin financing and securities lending (信用交易/融資融券資格股票) in the first place — TWSE publishes the current list. Stocks not on that list cannot be margin-shorted at all, which makes the reference-price rule moot for them.
FAQ
Can you short below the reference price, in one sentence?
Generally yes, since 2012-09-23, for margin-eligible stocks — with one exception: if the stock closed at limit-down the previous day, the restriction re-applies that day.
What is the "reference price" (平盤)?
The previous trading day's closing price. "Below the reference price" means placing a short-sell order at a lower price than that.
When exactly can't you short below the reference price?
When the stock closed at the daily lower price limit (limit-down) the previous trading day — or had no trade but its lowest ask at the close was at limit-down. The restriction applies only to that stock, only that day.
Does this restriction apply to ETFs?
No. Index ETFs are fully exempt from both the below-reference-price restriction and the limit-down exception.
When did this rule take effect?
The current, more permissive version has been in effect since 2012-09-23. Temporary, emergency-only full short-selling curbs have been imposed during specific market-stress episodes and later lifted — those are separate, one-off measures, not this standing rule.
Does this rule apply to all stocks?
No — only stocks the exchange has designated as eligible for margin financing and securities lending. Stocks outside that list cannot be margin-shorted at all.
Not investment advice. This is a factual summary of TWSE's short-sale price-restriction rule for margin-eligible stocks, not a recommendation about when or whether to short. Source: Taiwan Stock Exchange.