Assent Conversions?

I certainly hope something happens, but it's been my misfortune to mix hope and trading. I think it could be an easy argument to remove the uptick rule from issues that have SSF's as futures actions would certainly influence the cash market for these issues. Well, for the rest of them, who cares. Without adequate liquidity, you can't trade any size anyway. I probably don't have enough experience to comment any further. I just generally believe that all the nit-picky regulations to more harm than good.

Thanks for your willingness to share your knowledge! :cool:
 
To TraderProfit....Yes, you are correct...we won't be investing any money in fighting a rule that has little or no effect on our traders anyway. The firm's that have been negatively hit by the rulings will either conform or fade away.

As I said when the interpretations came out...this is much to do about very little. Follow the rules, make money, repeat...."ain't that all there is to it?" LOL

Don
 
I believe the SEC doesn't want to give explicit guidance.

However, you should be aware that there has always been a prohibition against doing something indirectly that you are not allowed to do directly. SEC can hang their hat on that.

Remember, SEC has no criminal authority, so the burden of proof is much lower, and the funds available to pursue thier objectives are relatively unlimited.
 
SLIPS

The Slips product has been out since jan 1 through Hold Bros. They have been actively used to sell stocks on a downtick since then. They are very expensive. A round turn costs .046. That is right, almost $50 per trade. It is crazy, but works at times.

Here is how a slip works.

Max slip is 1000 shares per 30 sec.
the bid has to be NX able (auto execute)

You the trader enter the order to execute a slip. the offering BD of the slip has a program that looks at the market of the stock and determines the following
The bid size must me more than 1.
A slip can only execute within 5 cents of the previous NY print.
Bid must be NX able.

If all the above is met, The BD offering the slip will create an uptick on an off exchange, and your order will execute against that uptick. The offering BD will then be long the stock, and ATTEMPT to NX the current bid. This is where their risk comes in. Since they are long, if the bid fills before the slips BD can execute, then they offer the stock down 30 or 40 cents, and just dump it. The biggest problem is that the firm offering the SLIP passes all the "extra" costs on to the trader. If they take a lose of 20 cents then they will charge you a "surcharge" at the end of the day.

Now understand all the above takes place in a fraction of a second.

VERY EXPENSIVE, and only useful in certain circumstances.

Make what you will of it.

Bandit
 
I think if what you describe is accurate, these Slips should pass regulatory muster for there is a big element fo risk inherent in the strategy which were absent in the bullets and even conversions. In fact these should be more legal than the conversions 3 months out! What is amazing is that the offering BD's are charging a nickel per share and still pass the costs if the nx bid should be unexecutable.You'd think that they already got their compensation from the nickel for they are assuming the risk.
 
Quote from bandit:

I think the slips will pass regulatory scrutiny, but the pass through charges is what might be the sticking point.

Bandit
More...

Thank you for the information...it appears that my earlier information was correct, albeit incomplete...by having the spread of the NX to worry about...it just makes things worse.

Don :)
 
Quote from bandit:


If all the above is met, The BD offering the slip will create an uptick on an off exchange, and your order will execute against that uptick. The offering BD will then be long the stock, and ATTEMPT to NX the current bid. This is where their risk comes in. Since they are long, if the bid fills before the slips BD can execute, then they offer the stock down 30 or 40 cents, and just dump it. The biggest problem is that the firm offering the SLIP passes all the "extra" costs on to the trader. If they take a lose of 20 cents then they will charge you a "surcharge" at the end of the day.
More...

That's a bit shady. I know for Hold, there is a third party doing the uptick and getting rid of the long. Wonder how trustworthy they are. I certainly have not heard good feedback about slips at Hold, in fact I have not heard much. Someone once said that you rarely get filled.

Just a sad state of affairs for traders dealing with this uptick rule scam.
 
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