TEMPO.CO, Jakarta - Indonesia Stock Exchange (IDX) is implementing short selling transactions in stages once again.
The Financial Services Authority (OJK) previously advised postponing the short selling transaction, originally scheduled for September 17, 2025, and resumed it on March 13, 2026. OJK then directed the exchange to reintroduce short selling. The transaction will take effect in October 2026.
In short selling, an investor borrows stocks they do not yet own. The investor sells the securities when the price is high and buys them back when the price drops. The investor hopes to profit from the difference between the buying and selling prices.
IDX Director of Development, Inding Pardi, said the reintroduction of short selling is partly due to the limited number of short-selling transaction notes from Morgan Stanley Capital International (MSCI).
"The other reason is, of course, our market is relatively stable. Although from the IHSG (stock index) side, it is still far below the all-time high, if we look at our market, it is quite stable," he told reporters at the IDX Building on Friday, September 18, 2026.
According to Iding, short selling is an essential instrument for hedging and risk management strategies. However, short selling could be speculative for some investors. Iding emphasized that avoiding trade manipulation in short selling transactions is the most important thing.
IDX will implement short selling for certain stocks considered liquid. Iding said that, initially, five stocks from the LQ45 index can be traded for short selling, one of which is from the banking sector.
"Why does it have to be liquid? Because short selling is a trading strategy to prevent stocks from being easily manipulated in transactions and their prices fluctuating," explained Iding.
After being implemented in stages, IDX will consider enabling short selling on a broader scale.
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