South Korea will resume short selling for the first time in a year and a half on Monday, after the government lifted its ban.

The government imposed a complete ban on short selling in November 2023 after a series of naked short selling violations involving global investment banks. 

Starting Monday, short selling will be allowed again for all listed firms. 

Short selling, a trading strategy in which investors sell borrowed stocks in the belief that share prices will fall in the near future, helps remove stock price bubbles and correct overheated markets, but may increase selling pressure in the market and raise volatility. 

To address concerns, the Korea Exchange plans to operate a central short selling monitoring system to detect and prevent illegal short selling.