SEC may Reinstate Uptick Rule

uptick doesnt bias shit.

it was there to maintain some semblance of order.

Im not scapegoating the rule change as the cause of our problems here, but there is more to that rule than 99% of you seem to understand.
 
Quote from dtrader98:



Coincidence that the same mechanisms used to prevent one in 100 yr fat tails, were removed right before the next one in 100 yr fat tail took place?
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so you really think market collapse has nothing to do with fundamentals but only with uptick rule?

all is good and we just need an uptick rule?

shorting was banned for several weeks in October with all banking stocks

much better than uptick rule you advocate
volatility still was huge. and stock market was down

Actually I favor reinstating uptick rule too. as I don't believe it will change anything but it would be interesting to see it in reality
one month trial would nice to calm down everyone
 
I agree with Angry Cat... If the uptick rule is to be unbiased then there needs to be a downtick rule. *Thumbs up Angry* explained well.
 
theres is no 'free market' if there was a free market, you can't short okay. there are no buyers if price is crashing.

the other guy on the side of the buyside is the market maker.

the bid and ask is the market maker.

only reason the uptick rule was abolished so hedge funds and some funds could HEDGE there long positions or profit from a market correction. but with market correction bigger that they expected, you see, prior to uptick rule most daytraders only went long on NYSE stocks cause you can't make money on downtrend shorting the market on momentum. daytraders or automated systems only made money on long trades on momentum.


oh forgot my last post.

can't believe the morons in SEC and some traders still believe in free market b.s. the market rigged for profit


Quote from lpchad:

"She is exploring whether to impose restrictions on short-selling, a type of trade in which an investor profits on stock declines. One idea she is considering is the revival of the uptick rule, a regulation that prohibited short-selling while a stock is declining."

What type of restrictions on short selling? Scary. The banks deserve to be priced where they are, the free market worked flawlessly.
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Quote from kashirin:

so you really think market collapse has nothing to do with fundamentals but only with uptick rule?

all is good and we just need an uptick rule?

shorting was banned for several weeks in October with all banking stocks

much better than uptick rule you advocate
volatility still was huge. and stock market was down
More...

It's not so much that I advocate uptick rule, as I tend to agree with some of the points about market efficiency and distortions imposed by up-tick rule.

The issue I have is with the methodology they used to argue that removal of the rule would have no impact on market volatility. If you go back and read the actual studies and pilot program that gave the green light, I think you'll find that it was very poorly conceived and horrendously biased. For one, anyone that understands out of sample testing and mining bias, knows that you don't conveniently pick a small window of low volatility to draw conclusions about the future inference of any hypothesis.
The mere fact that volatility wasn't explosive for the past 20+yrs since 87 should have been a simple enough argument to use the 'if it ain't broke don't fix it' principle. Of course, right after they put their fix in, the market imploded
(coincidentally perhaps, but about 80 yrs earlier than expected by any probabilistic model). And to simultaneously remove the 80A collar at the same instant was obviously not a bright idea in retrospect.
One has to wonder if it was only sheer ineptitude that generated the combined timing of these decisions.

Would bringing it back help? Hard to say, now that the damage has been done, but I do agree with Landis that it would certainly slow down the velocity and provide some damping if not a short jolt to the upside.
 
Quote from dtrader98:

Gee let's see... Our detailed and thorough research has without a shadow of a doubt demonstrated that the uptick rule removal
and simultaneous removal of collar 80A (put in place after 87 debacle) would have absolutely no impact on market volatility. Now go back and look at a 1 yr VIX chart post removal, and try to see how well that validates their detailed study.

Coincidence that the same mechanisms used to prevent one in 100 yr fat tails, were removed right before the next one in 100 yr fat tail took place?
More...

They vix spiked in 2000-03 bear? Lets see you research.

Just read your other post. Reimposing it might help give a pop to the market in the very short term but if all it does is reduce or clear most of the shorts in the market it will only create faster down moves on the next leg. Air pockets come to mind.
 
You uptick rule guys are wrong. Every big high frequency shop/ prop shop will get around this with market maker exemptions or bilateral otc products (no i am not talking about bullets or conversions). Also do you really think the ETFs are a problem??? The Spoos trade an order of magnitude more notional value than the SPYs and you can't have an uptick rule in the futures market unless you close it.

The bottom line is this conspiracy, "the man" talk is all BS. The man is going to buy or sell based on his assuption of fair value. He agnostic to the direction of his position, his only goal is making money.

Do you honestly think that if a large fund or two jammed the CDS market while naked short selling XOM that other shops and the company itself wouldn't step in and crush them? The bottom line is you are either a turd or not. There is always more money willing to come in than any collective group of conspirators can come up with if the opportunity is rich enough.

THE SHORT SELL BAN WONT SAVE A BANKRUPT COMPANY FROM TRADING TO ZERO. WHY INSTALL ARTIFICIAL MECHANISMS TO SLOW DOWN THE VELOCITY OF FINDING FAIR VALUE? WHO DOES THAT PROTECT IN THE LONG RUN?
 
While we’re re-instituting the up tick rule… why not lobby for a down tick rule – then we’ll have both – THAT”LL fix volatility once and for all



The up-tick rule only affected / will affected the retail traders… The institutions had/ have ways around it… bring it back and we’re the only ones who will suffer…

Hell who wants a more level playing field for us anyway



And the argument about the lack or up tick rule bringing down the market


Let’s just ignore the housing crisis, the CDS, the greed, the incompetence, the fear, 2x/ 3x ETF’s – they’ve never had anything to do with anything – anyway


Redneck
 
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