SSR: the short sale restriction (Rule 201)
SSR, the short sale restriction, is the SEC's Rule 201 circuit breaker: once a stock falls 10% or more below the previous day's close, short sales in it may only execute at a price above the current national best bid. The restriction lasts for the rest of that day and the whole of the next trading day.
Why it matters to a small-cap momentum trader
For a short seller, SSR takes away the easy entry. You cannot hit the bid; you have to offer above it and wait for a buyer to take your shares, which is hard on a stock that is falling fast. Small caps that faded hard yesterday are often on SSR today, so a trader planning to short a morning spike needs to check first. Long traders watch it too: with shorts kept off the bid, a falling stock loses one source of selling.
The rule
Trigger. The stock's price falls 10% or more below the previous day's closing price on its listing exchange.
Duration. The rest of that trading day and all of the next trading day.
What is allowed. Short sales at a price above the current national best bid. A short order that was above the bid when it was first displayed may still fill at its price after the bid rises to meet it. Selling shares you own is not restricted.
Since when. Rule 201 has applied to stocks listed on US exchanges since February 2011, and the 10% trigger and its timing have not changed since, so every day you can replay falls under the same rule.
SSR in Hindsight Markets
SSR comes from the flag the exchanges published that day, at the moment they published it, so it switches on in a replay when it did in the market. The Level 2 header shows it. Under SSR, a market short or a short limit at or below the bid is refused with the reason; a short limit above the bid rests and can fill when a buyer lifts it. A hard-to-borrow stock needs a locate first, which is a separate check from SSR.
Practice this on a real past day in Hindsight Markets
Pick a day after a small cap collapsed, try to short the next morning's bounce under SSR, and learn where your limit has to sit to get filled.