New rules mean sellers must wait a day to pay back loans China took another step to curb volatility in its stock markets late Monday, moving to clamp down on short selling in the country. Under new rules, short sellers must wait at least one day to cover their positions and pay back loans used to buy shares. Previously, investors could cover their positions within the same day, a practice China’s stock exchanges said tends to “add to abnormal volatility of stock prices and affect market stability.” The exchanges hope the new rules will discourage short selling because they effectively force investors to keep their bets open overnight, leaving them vulnerable to any new stimulus measures introduced by Beijing before trading resumes. The short-selling curbs, a few days after the government began cracking down on program trading, are the latest in a series of measures by Beijing aimed at propping up a stock market that has tumbled 30% since mid-June after a long bull run. But Li Lei, an analyst at China Minzu Securities, said the revision is expected to have limited impact on the market, due to the small scale of short selling. “Securities firms and listed firms have little incentive to develop short selling trade, for fear of dragging down stock prices,” added Li. An expanded version of this report appears on WSJ.com