Short on shorts?

Increasingly frothy Asian stock markets may mean investors need to take more short positions for hedging. It seems to be getting easier to do so in Asia, but it's still unclear where liquidity would lie in a market downturn

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Taking large short positions in stocks in Asia has always been more difficult than in the US - and that's especially true in certain restricted markets, including China, India, Korea and Taiwan. This could prove a problem for hedge funds, as well as other investors, should they feel that equity markets in the region, some of which have gained more than 100% in the past 12 months, are due for some sharp corrections.

Indeed the Chinese equity market has already encountered some big falls. The

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