We use a natural experiment occurring on HongKong stock market to examine the effects of removing short sales constraints ons everal trading charact eristics of underlying stocks.We find that the trading of underlying stocks become less active after the lift of short sales constraints; Meanwhile the liquidity of underlying stocks is tightenedand the information a symmetry among the investors aggravates. But we fail to findany evidence indicating that the lift of short sales constraints seriously destabilizes the market.We further provide astoryofnoise traders to explain these empirical findings.