摘要：The paper discusses the possible effects of short sales onthe operation of a very small stock market such as the Maltese one.After studying the basic mechanics of short selling procedures, thepaper reviews the salient literature with particular reference tohow short sales may enhance informational efficiency and theirrelationship with liquidity. The paper proceeds by examiningthese relationships in the context of the Maltese securities market.The study reveals that short sales may be desirable on the Maltesestock market for enhancing price efficiency and liquidity, yet amore formal framework for conducting such transactions is re-quired. In addition, short positions may be particularly risky in thecontext of the Maltese stock market, due to low liquidity level
