Probably stair step down at a slower pace. This should eliminate flash crash type price action.
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new short selling rules
- Thread starter zdreg
- Start date
I noticed this the other day when I was trying to short CEDC...called our broker and heard about this rule.
Not a huge deal. Noticed that it forces me to hold my shorts longer in these types of stocks because I know I may not get that price again.
Who shorts anyway? Go POMO!
Not a huge deal. Noticed that it forces me to hold my shorts longer in these types of stocks because I know I may not get that price again.
Who shorts anyway? Go POMO!
lot of ambiguity in there for everyone ,sounds like we will be the only one' s it applies toQuote from AlexLutiera:
I don't know what is the Alternative Uptick Rule. I decided to search in my internet. i just want to share to the members when this rule was approved by the Sec.
SEC Approves the Alternative Uptick Rule
Securities Law Update
February 26, 2010
On February 24, 2010, the Securities and Exchange Commission ("SEC") approved amendments to rule 201 of Regulation SHO ("Alternative Uptick Rule") under the Securities Exchange Act of 1934, as amended ("Exchange Act"). The Alternative Uptick Rule restricts short sales in exchange-listed equity securities that experience a price decline of more than 10% on any trading day from the prior trading day's closing price. Once the 10% circuit breaker is triggered, the subject securities can be sold short only at a price uptick, i.e. when the price is above the current national best bid ("NBB"). This restriction will remain in place for the remainder of the trading day on which the circuit breaker is triggered and the following trading day. The Alternative Uptick Rule is designed to prevent abusive short sales that may be used to drive down the price of a security or exacerbate a market decline in a security.
The SEC has approved some limited exceptions to the Alternative Uptick Rule. We understand that the SEC will allow short sales regardless of the tick, even when the 10% circuit breaker is triggered, in the following situations: (1) a broker-dealer determines that the price of the trade at the time of submission was above the NBB and it has in place policies and procedures to monitor its short-sale activities pursuant to this exception; and (2) the person selling short is deemed to own the securities but delivery of the securities will be delayed. The SEC has also approved exceptions to the Alternative Uptick Rule for certain odd-lot transactions, certain domestic and foreign arbitrage transactions, overallotment or layoff sales, riskless principal transactions, and volume weighted average price ("VWAP") transactions. Notably, the SEC did not adopt an exception for bona fide market-making activities.
For assistance with any of the issues addressed in this update, please contact any one of the Bracewell & Giuliani attorneys listed on the upper right-hand side of this page.
http://www.bracewellgiuliani.com/in.../SEC_Approves_the_Alternative_Uptick_Rule.cfm
Quote from AlexLutiera:
I don't know what is the Alternative Uptick Rule. I decided to search in my internet. i just want to share to the members when this rule was approved by the Sec.
SEC Approves the Alternative Uptick Rule
Securities Law Update
February 26, 2010
On February 24, 2010, the Securities and Exchange Commission ("SEC") approved amendments to rule 201 of Regulation SHO ("Alternative Uptick Rule") under the Securities Exchange Act of 1934, as amended ("Exchange Act"). The Alternative Uptick Rule restricts short sales in exchange-listed equity securities that experience a price decline of more than 10% on any trading day from the prior trading day's closing price. Once the 10% circuit breaker is triggered, the subject securities can be sold short only at a price uptick, i.e. when the price is above the current national best bid ("NBB"). This restriction will remain in place for the remainder of the trading day on which the circuit breaker is triggered and the following trading day. The Alternative Uptick Rule is designed to prevent abusive short sales that may be used to drive down the price of a security or exacerbate a market decline in a security.
The SEC has approved some limited exceptions to the Alternative Uptick Rule. We understand that the SEC will allow short sales regardless of the tick, even when the 10% circuit breaker is triggered, in the following situations: (1) a broker-dealer determines that the price of the trade at the time of submission was above the NBB and it has in place policies and procedures to monitor its short-sale activities pursuant to this exception; and (2) the person selling short is deemed to own the securities but delivery of the securities will be delayed. The SEC has also approved exceptions to the Alternative Uptick Rule for certain odd-lot transactions, certain domestic and foreign arbitrage transactions, overallotment or layoff sales, riskless principal transactions, and volume weighted average price ("VWAP") transactions. Notably, the SEC did not adopt an exception for bona fide market-making activities.
For assistance with any of the issues addressed in this update, please contact any one of the Bracewell & Giuliani attorneys listed on the upper right-hand side of this page.
http://www.bracewellgiuliani.com/in.../SEC_Approves_the_Alternative_Uptick_Rule.cfm
this news is over 1 year old.......is this happening or just a speculation? when is it effective?
Quote from forsalenyc:
this news is over 1 year old.......is this happening or just a speculation? when is it effective?
It is in effect as of start of this month. I have encountered it a couple of times now. The one that really catches me is that it lasts till the CLOSE of NEXT TRADING DAY.
The stupid part is that for stocks around $1-$2 area this rule kicks in way too quickly. There should be a rule about the price of the stock. For example $1.11 stock moving to $1 kicks this rule in which to be honest is stupid. Not sure but I guess it applies sub $1 as well.
They will need to tweak this rule in the future
Quote from zdreg:
any interesting stories with the new rule?
Not really, but why it's in effect for 2 days once it's triggered is beyond me. Numerous times I have encountered a stock that is ripping to the moon but you can't short it on a downtick because the previous day it licked -10%.