Sec Rule 201
- Thread starter Nobert
- Start date
Uptick rule put in place after financial crisis. Stocks that are down > 10% intraday can only be shorted on an uptick.
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You can hold it but only initiate a new short position on an uptick as long as it’s 201.
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Robert Morse
Sponsor
https://www.sec.gov/news/press/2010/2010-26.htm
Rule 201 includes the following features:
- Short Sale-Related Circuit Breaker: The circuit breaker would be triggered for a security any day in which the price declines by 10 percent or more from the prior day's closing price.
- Duration of Price Test Restriction: Once the circuit breaker has been triggered, the alternative uptick rule would apply to short sale orders in that security for the remainder of the day as well as the following day.
- Securities Covered by Price Test Restriction: The rule generally applies to all equity securities that are listed on a national securities exchange, whether traded on an exchange or in the over-the-counter market.
- Implementation: The rule requires trading centers to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent the execution or display of a prohibited short sale.
Your simulation already seems promising, as it was a good day to be short TLRY. The uptick rule makes it harder to get filled when you want to sell short (for two days), but if you’re already short it does nothing to your existing position. Usually it’s good news, since it means the stock has gone down a lot recently!
Robert Morse
Sponsor
I took a look at your portfolio. I realize this is sim. Except VOO, all the positions are the same size-about $23K. Do you think it is a good idea to have the same allocation in TLRY as TLT-NKE-BABA-GLD?
Robert Morse
Sponsor
Interactive had shares of TLRY today. I shorted some.
Does this sim take into account the cost to short a stock like TLRY? If you were trading with real money, you would be paying around 1.50 per day to be short it, so it would have to go down around 10 points every week for you to break even.
That’s important to include, but not nearly as bad as you say. TLRY is down to about 50% or $0.10/day, although that cost had been much higher recently.
Does this sim take into account the cost to short a stock like TLRY? If you were trading with real money, you would be paying around 1.50 per day to be short it, so it would have to go down around 10 points every week for you to break even.
That’s important to include, but not nearly as bad as you say. TLRY is down to about 50% or $0.10/day, although that cost had been much higher recently.
Could you expend a little bit more on that ?
For example, how much it would cost to me , to hold it, per / day, with $25 000 size short position ?
Does that pay / tax, varies per broker / stock ?