Cox should be hanged for X the uptick rule

[KeithOmalley]

Quote from bbqbbq:

velocity seems to be bigger because leverage was bigger in this bear market then the previous one from 2001. if you want to eliminate velocity you need to abolish margin.

every daytrader was levering there little accounts back in 2001 before they put in place the patten day trader rules.

yes there are 10x more hedgefunds and many much more leverage/leverage in the banks.

on a side note can someone explain to me how say the skf and ultra shorts increase the volitility significally? i mean volume on the market is like what 4-5 billion shares a day. skf only does 30 mil a day.

 

[murray t turtle]

Quote from Landis82:

I totally disagree.
And yes, I am a professional trader and one who used to be a floor trader in #4 WTC.

The VELOCITY ( not "volatility" ) of price movement in the market has gone to such incredible levels that portfolio managers, traders, etc. are no longer able to humanly "process" the data that they are seeing. Ever seen a market in the electronic "age" drop 200 points in the last 7 minutes of trading before 2007? Ever think that the selling wasn't all from natural sellers?

Think the inverse ETF funds benefit from the lack of an "uptick" rule? How about the equity derivative desks at the investment banks that "facilitate" customer orders and trade against the customer?

Just the same old passive "free markets for free men" instead of "free and FAIR markets for free men" mantra that lead to the "Commodity Futures Modernization Act of 2000" and the special interests that were ALLOWED to get away with financial murder.

Interesting how the Pro Fund Ultra Bear ETF's came out in the summer of 2006, and about six months later the "uptick" rule was eliminated.

Hmmmmm....

=================
Congrats surviving the WTC,Landis82 .

Sure you are probably right on final 70 minutes or 7 minutes;
not being all natural sellers.

But[ last uptrend] & this bear has much more volume than last one;
& would rather see it drop 200 points last 7 minutes ,than go up
============================================= 200 points last 7 minutes in a bear market. So, no doubt more leveraged funds in this bear, than last bear.

And i have used quote ''free markets for free men'' not so much an ad for one place;
but a marketplace fee of silly micro-managed rules especially .

 

[liulala]

The official SEC investigation on Cramer confirmed that he has no wrong doing. There are multiple charges against Cramer over the years, but all dismissed.

Quote from Tauvros:

He knows the 'secrets' alright.......

Talking Up His Own Book
Robert Lenzner and Victoria Murphy, 03.01.02, 7:10 PM ET

NEW YORK - Legendary hedge fund operator and confrontational television commentator James Cramer has been getting publicity from news that he's working on a juicy Wall Street story: his own biography. But the real dirt might be elsewhere.

In a soon to be released tell-all tale, former Cramer & Company employee Nicholas Maier accuses TheStreet.com's co-founder of using CNBC anchors and his own television appearances to promote stocks that he would promptly sell, making a quick gain on the upswing.

In Trading With the Enemy, to be published this month by Harper Business, Maier alleges that CNBC anchors Maria Bartiromo and David Faber were used like pawns to talk up stocks that Cramer's hedge fund had purchased. He did this by giving them heads-up on analysts' upgrades and downgrades in particular stocks.

Writes Maier: "We were the first firm most brokerage houses told such news [of upgrades and downgrades], and Jim decided to use this early-call status to help the reporters, who all wanted to break a story."

Maier goes on to explain that after the stocks were touted on television, Cramer would promptly dump the firm's position: "No sooner would Maria be thanking us for the help than we'd be getting a payback--a quick hit thanks to our friends at CNBC."

In one case, recalls Maier, Faber called Cramer and immediately Cramer demanded that the firm buy a hundred thousand shares of MCI Group (nasdaq: MCIT - news - people ). "There will be news!" said Cramer's colleague to the broker at Goldman Sachs, who also purchased shares. No more than an hour later, Faber went on the air with news that telecommunications giant MCI was rumored to be an acquisition target. Maier admits he does not know what Faber actually told Cramer during their conversation and writes, "Reporters often called us, asking if we could confirm a rumor in the marketplace."

Cramer's own television appearances also were used to intentionally sway the markets in his favor, Maier writes. For example, while Cramer was on CNBC promoting "a great investment for the long term," Maier writes that Cramer's firm was making quick gains: "Our real strategy, however, was all about taking profits now. Back at the office, we were supposed to dump stocks after a quick half-point gain. On TV, Jim would tout a stock we owned, but if it moved up, we would sell."

"Jim would do the opposite of what he was saying on television," Maier told Forbes. Cramer did this behind the scenes too, says Maier. "He would hear rumors, pass them on and then do the opposite," adds the author, who insists that he has the trading documents to back up his claims. Maier worked under Cramer between 1994 and 1998.

Why put himself on the line? Not for a hefty book advance: "Mine is trivial compared with Jim's $1.5 million," says Maier. "My goal is to show people how Wall Street really works. It left a very bad taste in my mouth."

Cramer used investment banks to get quick gains too, according to passages in the book. Maier details playing pool with one analyst from Salomon Smith Barney who, while polishing off a third beer, hints that his firm was going to make a rating change on a specific company. Sure enough, by the time the stock had been upgraded to a "strong buy," Cramer & Company had purchased 50,000 shares--all executed with Salomon at the urging of the analyst, who said Salomon landed a cut on the trade.

Both sides had incentives to "leak" information. Cramer & Company made a quick profit, and the investment banks landed commissions on the trade.

This way, both sides had incentives. This kind of activity was widespread, says Maier: "Analysts at every one of the major brokerage houses were doing this."

Maier describes arrangements Cramer & Company made with the investment-bank underwriters of "hot" IPOs during the late 1990s: "Nearly all of the major investment banks made us commit to after-market orders, and they kept score .... This was their way of making sure hot deals stayed hot."

By buying ten times more shares than their allocation on the offering, Cramer & Company were helping to drive the price of deals even higher in the stock market. Maier writes that time after time, "I would give the brokerage house 50,000 shares to buy on top of the five [thousand] they gave us."

"It was the brokerage houses that created a facade of legitimacy to manipulate the situation, and ultimately it was the little guy at home, not fully comprehending the process, who bought these stocks at an assuredly inflated value," Maier writes.

Cramer is not new to accusations of recommending stocks in his own portfolio. In 1995, he was investigated by the Securities and Exchange Commission for touting stocks that his firm held positions in. The matter ended with no action.

Cramer was unavailable for comment. Maier claims that Cramer twice attempted to legally thwart the book from going to press. The SEC also declined to comment on the book's allegations.

On Friday evening CNBC issued the following statement:

"CNBC has the highest journalistic standards in the business. Any insinuations [that] our reporters' journalistic practices have been anything less than completely ethical are outrageous. These accusations are filled with innuendo and insinuation. They portray as improper, routine phone calls that may or may not have happened. David Faber and Maria Bartiromo have the utmost integrity. They have always operated with the highest of standards. We have discussed the accusation on the five pages we've seen with Jim Cramer and he has told us that these charges are completely unfounded and that they are leveled by a disgruntled former employee of his who he dismissed for poor performance."

http://www.forbes.com/2002/03/01/0301cramer.html

 

[liulala]

I am not talking about Cramer's stock picks which is subject to furthur debate. But on the issue of uptick, Cramer is clearly much clever than the goverment.

Quote from KeithOmalley:

idiot! anyone who just quotes jim cramer is another stupid lemming. "Booyha ski daddy". do you just watch jim cramer and think u can trade? ive never seen a good trade quote jim cramer. on a side note did anyone see Erin Burnett call jim cramer out around 2:45 on tus about the uptick rule? she actually had facts. NOTHING you or JIM cramer have.


can anyone even name 1 stock that would be higher if there was still a uptick rule? just give me 1 stock. everyone loves to complain about the uptick rule, but how about the 2 trillion $$ in bank writedowns and 40-1 leverage

 

[KeithOmalley]

Quote from liulala:

The official SEC investigation on Cramer confirmed that he has no wrong doing. There are multiple charges against Cramer over the years, but all dismissed.

there has been multiple charges alleged against Elliot spritzer but all where dismissed also.

You guys really cant mock the sec and then say the sec has dismissed all allegations against Jim cramer therefore he is innocent

the sec coulnt find a 50 billion dollar fraud via Mr. Madoff

 

[Anaconda]

Quote from trump-baja:


Maybe the "exploitation" you speak of is tricks by market makers and specialists. In which case I agree with you - but that is far from the point brought up by the OP.

It's exploitable by daytraders as well, that's how I was taught to trade when I started.

 

[Anaconda]

Quote from tradersboredom:

uptick rule means you cannot short in a downtrend.

you can't short or sell at ask when the price is going down.

LOL yeah ok. You obviously do not trade.

 

[Anaconda]

Quote from Jachyra:

The uptick rule does not prevent anybody from shorting in a downtrend... it just means that before you can short, you need 1 puny, measly, little uptick first. You know how many upticks you get in a downtrend? Just as many downticks as you get in an uptrend.

I traded back in the days of the uptick rule and I can tell you with absolute certainty that the only people who were inconvenienced by this rule was Joe Blow the Average Retail Trader. Anyone who knew anything at all about the markets that was interested in shorting, would either box against their account, put on a conversion, or pick up a bullet. If you walked into any prop shop like Echo or Bright I guarantee you couldn't find very many traders that needed to wait for an uptick to put on their shorts.

The idea that the regulatory agencies add and remove these rules to protect the public interest is a little far fetched IMHO... most of the time they're designed to further exploit the advantages and edges that the professional traders have over the retail traders.

Bingo!

Something else to note, uptick rule had no effect on tech burst and the subsequent sell-off into 2002. Strong down moves, very strong, especially with traders hitting down shorts and setting off stops.

 

[Landis82]

Quote from Angrycat:

ETFs were never subject to the uptick rule. Neither were NASDAQ traded stocks, nor commodities nor a long list of other securities. The SEC engaged in exhaustive research with regard to the uptick rule and found that while it didn't achieve its intended purpose (which I have a quarrel with anyway), it did suck the liquidity out of thinly traded shares. If something doesn't work, why keep it?

Your understanding of this issue is so bad that I don't even know where to start.

Yeah, ETF's are not subject to the "uptick" rule. Duh. But try turning your brain on for a moment and take one more step in the thought process and ask you just HOW do the Ultra-Bear ETF's replicate the short portfolio of the actual index?

 

[Landis82]

Quote from NY0BScalper:

Sounds like someone's a little slow on the keys and underwater in his long term portfolio.

Dumbass.

(No I didn't lose money today... which is the assumption anyone intelligent has when they see a trader bickering with/insulting people over the internet).

Also, Landis, why are you insulting KeithOmalley? That dude was in Trader Monthly top 30 under 30 a while back if I remember correctly. Someone like that you want on your good side so you can pick his brain.

With all due respect to Mr. O'Malley, while you might be impressed by "pop" financial news media I couldn't careless who was in TRADER MONTHLY.

By the way, weren't you the guy that was bitterly complaining about how you commuted into the City only to find that your beloved prop firm where you trade at had CLOSED its doors for trading on a Friday, totally unbeknownst to you?

Talk about putting yourself into a "dumbass" position . . .

This discussion has nothing to do with the point that I made in an earlier post ( and most here on this thread were not able to comprehend because their reading comprehension is so poor ) that the VELOCITY of the market ( not "volatility" ) has gotten to such a heightened degree ( as compared to even electronic trading "age" standards ) that people are unable to cognitively "process" the quotes that they are seeing on their screens, and often think that they may have missed some sort of news announcement that hit the marketplace.

If you want to trade commodities, feel free to do so. Commodities do not have shareholders, they do not have board of directors, they do not have employees, and they have nothing to do with an instrument that involves publicly controlled entities. No "uptick" required. I should know, I traded them on the floor at #4 WTC for many years.

Make no mistake about it.
Cox is an idiot.

He bans the shorting of financial stocks for a period of time ( which is totally ignorant in my opinion because it removes the hedge of convertible bond holders and thus removes liquidity from the corporate bond market ) and yet Cox refuses to bring back the "uptick" rule that worked quite well for many many years.

Think the ETF "lobby" wasn't having a few meetings with Cox back in 2006 about paving the way for eliminating the "uptick" rule?

Think again.