We examine the effect of the Sep 2008 ban on short sales of specified U.S. financial stocks on the trading behavior in the options market. While theory suggests that long positions in put options are substitutes for short positions in the underlying stock, the ban appears to have substantially driven up the price of trading in options, to the extent that trading activity decreased for both puts and calls during the ban period. On average, the relative spread of an option increases and the daily traded volume decreases during the ban period. Additionally, a drop in the incidence of put-call parity violations coincides with the start of the ban and continues beyond the ban’s expiration.