why should price discovery be asymmetrically biased? nobody ever talks about "bull raids"
i should close my schwab account
i should close my schwab account
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Schwab doesn't like shorting
- Thread starter Neodude
- Start date
working with the gravity metaphor, what happens if the system artificially lessens gravity? don't you end up with rocks on top mountains that really have no natural reason to be/stay there? do you want the "value" of your assets to be the product of an arbitrary rule, vs as much objective merit as possible?
imo objective valuation comes from free moving equilibrium, transparent and equal access to position types, a minimum of systemic bias, bailouts, fakery etc that tilt the real supply and demand for real assets... all of these things undermine a strong, real economy
imo objective valuation comes from free moving equilibrium, transparent and equal access to position types, a minimum of systemic bias, bailouts, fakery etc that tilt the real supply and demand for real assets... all of these things undermine a strong, real economy
Quote from cybtropic:
I've been trading everyday during this entire decline and I only trade equities. I'm just speaking from experience based on what I have seen.
Rumors by themselves did not cause the declines but contributed to it. No uptick rule was tested for some time before being implemented, but it was NOT tested in volatile times where fear prevails. No ONE thing caused the declines.
Here is the formula:
(NO UPTICK RULE + NAKED SHORTING + RUMORS) x FEAR = 50% decline in 15 minutes.
Defending getting rid of the uptick rule is like defending naked shorting or spreading rumors.
Lets look at some facts:
1. As of Nov 28th short interest was equal to 3.7% of all outstanding shares on the NYSE.
2. Naked short selling is now fraud and prosecuted.
Taking these two points into consideration it is unlikely that short sellers who make up less then 4% of the market activity and can't naked short anymore are creating massive bear raids, even if they are aided in their nefarious plans by the absence of the uptick rule.
Of course no one wants to look at the facts, people only want to find scape goats for their losses, because God knows there is nothing more unAmerican then a market that goes down.
A fair market is a symmetrical market, not one rigged toward one side.
-Neo
Data. Pure, hard data. Argue with this. Not the merits of Bidz. And look who the source is. By the way, any time Stock lemon, or any of these morons blast something , the stock is already impossible to borrow. So they have their shorts, naked shorts, derivitives.........they are after the longs to sell.
http://www.deepcapture.com/naked-short-selling-hedge-funds-is-it-esp-or-just-ftd/
This is why the powers that be are coming out against what we've been against for how many years.
Cox is toast. Politically, he's radio active.
http://www.deepcapture.com/naked-short-selling-hedge-funds-is-it-esp-or-just-ftd/
This is why the powers that be are coming out against what we've been against for how many years.
Cox is toast. Politically, he's radio active.
Quote from flytiger:
Data. Pure, hard data. Argue with this. Not the merits of Bidz. And look who the source is. By the way, any time Stock lemon, or any of these morons blast something , the stock is already impossible to borrow. So they have their shorts, naked shorts, derivitives.........they are after the longs to sell.
http://www.deepcapture.com/naked-short-selling-hedge-funds-is-it-esp-or-just-ftd/
This is why the powers that be are coming out against what we've been against for how many years.
Cox is toast. Politically, he's radio active.
During the same time frame the vix was trading in the twenties, not today's 50% range. Naked short selling was easy to get away with, which today is not the case. One example of an illiquid stock from 2007 being manipulated still does not make the case that today's entire market is being manipulated by bear raiders and that lack of an uptick rule is the cause.
-Neo
well, i hope you were strongly pushing for the creation of the downtick rule during the go-go 90s, when everything with a low float "floated" up no matter what the fundamentals were.
if you really want to have something to limit pushing a stock down, you'd need to have some size limitation, OTHERWISE an uptick.
btw, as others have posted, you COULD short previously without an uptick - thorugh ARCA. and market makers did. and stocks which weren't on the nas NMS could be. and those who had large transaction costs did. and those who used bullets in effect did (until that was taken away). and those who went offshore did. and...yeah, there are more examples.
if you really want to have something to limit pushing a stock down, you'd need to have some size limitation, OTHERWISE an uptick.
btw, as others have posted, you COULD short previously without an uptick - thorugh ARCA. and market makers did. and stocks which weren't on the nas NMS could be. and those who had large transaction costs did. and those who used bullets in effect did (until that was taken away). and those who went offshore did. and...yeah, there are more examples.
Quote from cybtropic:
I've been trading everyday during this entire decline and I only trade equities. I'm just speaking from experience based on what I have seen.
Rumors by themselves did not cause the declines but contributed to it. No uptick rule was tested for some time before being implemented, but it was NOT tested in volatile times where fear prevails. No ONE thing caused the declines.
Here is the formula:
(NO UPTICK RULE + NAKED SHORTING + RUMORS) x FEAR = 50% decline in 15 minutes.
Defending getting rid of the uptick rule is like defending naked shorting or spreading rumors.
HAVE YOU HEARD OF AN ARCA MARKET SHORT SELL? HAVE YOU HEARD OF RADZ? THERE HAVE BEEN WAYS TO GET AROUND THE UPTICK RULE BEFORE IT WAS TAKEN AWAY.
Quote from Neodude:
That might be so, but that does not mean anyone has proven a correlation between the uptick rule and velocity. People are coming to a conclusion without PROVING cause and effect. Just because some one says it is so, does not make it so.
If science used the same thought process we would still believe that the sun revolves around the earth. Either way, no one has proven that removing the uptick rule has caused nor increased volatility.
-Neo
Agreed.
It could be easily proven ( or disproven ) by the SEC taking a look at whether or not natural sellers were involved in certain price data, or short sellers. Pretty easily done. I don't have access to that kind of data, do you?
SEC Chairman Christopher Cox does, but for some reason he has not published any "white" papers on the subject even though there has been tremendous attention on this topic.
For background info, please also take into consideration that the double-short S&P 500 ProShares (SDS) were created back in the fall of 2006. I believe that the uptick rule was repealed back in the Summer of 2007.
My actual market history and experience ( going back to 1980 ) tells me that the VELOCITY has indeed increased. Whether or not that is the result of natural sellers liquidating, or short-sellers not required to sell on an "uptick" is certainly up for debate, but given some of the new products like the ETF's that I have mentioned above, it certainly seems as though there are more participants in the market place executing very high volume trades and thus creating more VELOCITY.
Just think.
Program trading to establish shorts for an Ultra-Bear ETF such as the SDS without having to wait for an "uptick" vs being required to obtain the "uptick".
If the speed and VELOCITY of price data doesn't increase, I'd be shocked.
Quote from Landis82:
Agreed.
It could be easily proven ( or disproven ) by the SEC taking a look at whether or not natural sellers were involved in certain price data, or short sellers. Pretty easily done. I don't have access to that kind of data, do you?
SEC Chairman Christopher Cox does, but for some reason he has not published any "white" papers on the subject even though there has been tremendous attention on this topic.
Please also take into consideration that the double-short S&P 500 ProShares (SDS) were created back in the fall of 2006.
My actual market history and experience ( going back to 1980 ) tells me that the VELOCITY has indeed increased. Whether or not that is the result of natural sellers liquidating, or short-sellers not required to sell on an "uptick" is certainly up for debate, but given some of the new products like the ETF's that I have mentioned above, it certainly seems as though there are more participants in the market place doing very high volume trades and thus creating more VELOCITY.
I can certainly agree with your statement. Velocity has increased, but does increased velocity give us enough reason to change market rules?
I think the question we have to ask ourselves should be: What kind of market do we want? My personal belief is that a fair market is one in which participants playing from the long and short side have the same set of rules, thus creating more efficiency and preventing such things as bubbles.
Before we make it more difficult to short we should ask our selves some questions:
1. Why is a price decline worse then an artifical price increase?
2. Why should we make it easier for markets to go up rather then down?
3. Is the increased velocity a short term phenomena that will ultimately make people more cautious investors, or is it a long term trend that will scare everyone away?
4. Can market participants adapt to increased volatility?
-Neo