SEC reviewing short sale rules

chasinfla · Jun 30, 2002

When the masses scream, the politicos react....only not always in the best way.

<b>No More Shorting On Wall Street? SEC Takes Another Look at the Rules </b>
Tom Taulli

Some pundits are predicting dire consequences for Wall Street if the SEC adapts measures it proposed that would curb or even eliminate short selling. The predictions might be farfetched - and most think shortselling is unlikely to be banned - but how the SEC acts could have major repercussions for trading firms.

<a href="http://www.tradersmagazine.com/articledetail.cfm?mag_id=1&aid=1110&year=2002">Full article.</a>

Gordon Gekko · Jun 30, 2002

first the day trading rule.....now this.............. :mad:

jmathers34 · Jun 30, 2002

Eliminting short selling all together is ridiculous. Gettting rid of the uptick rule is possible whe SSF arrive.

chasinfla · Jun 30, 2002

It was predictable. The sheep have to have a scape goat.

Once again, because of the recent tur moil in the markets, there is a renewed call to ban or change short selling. Annette Nazareth, director of the division of the SEC's Division Market Regulation, told the STA congressional conference in Washington in May. She said that, since the events of Sept. 11 some investors, angry about losses, are demanding that the practice being restricted or banned altogether. "I don't know if you know this," she told the audience of traders, "but there actually was a fair amount of lobbying on Capitol Hill to get Congress to ban short selling."

<a href="http://www.tradersmagazine.com/articledetail.cfm?mag_id=1&aid=1245&year=2002">source.</a>

Reading the article makes me think that the political approach is to give the masses something, while also giving the profession something. We should be OK.

Gansoro · Jun 30, 2002

Somebody should explain to the politicians, etc. that there are two sides to every trade. In order to sell a stock, whether going short or liquidating a long position, there has to be a buyer... the essence of the free market system. Buyers provide support not resistence. If a trader goes short, he must later become a buyer, whether to take his profit or cover a losing position. This point, in and of itself, provides support for a stock in decline. A case could actually be made that the more shorts there are on a stock, the more pent up buying pressure, and hence support, there is.

The "system" is not bad the way it is. However, if the "short" sighted politicians must do something to appease the "the masses," I say, the best way to "fix" the system is to eliminate the up tick rule. How 'bout that?

airspeed · Jun 30, 2002

This is just what I wanted to read as I started my Sunday morning. Damn. :mad:

Jim

skerbitz · Jun 30, 2002

who do they think is doing all the buying ?

The ONLY reason the markets haven't tanked into the proverbial toilet is the short sellers (and the PPT

periodically propping up the market by creating short covering rallies.

What a joke.

God save us from the SEC.

bungrider · Jul 1, 2002

Originally posted by skerbitz

God save us from the SEC.

yep. even if they don't eliminate any shorting rules, they'll still find another way to f@ck us up....

trdrmac · Jul 1, 2002

One funny webpage I was on was MSTR on Yahoo. This was around the time that the company was asking it's customers to have their brokers take their stock out of the street name, to squeeze the shorts. At the same time the CEO or whatever he was was selling 10,000 shares a month. The "Mother of all short squeezes" lasted about a day. That was $5 ago on the stock.

And I have to speculate that if it were not for shorts covering, all the longs bailing out would have done so at much lower prices.

SicilianTM · Jul 1, 2002

Originally posted by trdrmac
And I have to speculate that if it were not for shorts covering, all the longs bailing out would have done so at much lower prices.

Hey, why doesn't the SEC just ban all selling, long or short. Yeah, that's the ticket!