Short selling a stock -10%.

J

jnbadger

They are all over the place lately, but I'm getting conflicting information.

In my 57 exam, the rule was that when a stock was down 10% or more the previous day or the current day, you have to short on an uptick.

Sterling is good about this. Sometimes I'll try to hit the bid to get short, and the order will automatically go to the offer. But there have been other times recently when I'll just try it and I'll immediately get short on the bid.

Have the rules changed? Yes, I've thought about calling Finra, and I don't want to seem like an idiot to my compliance department and wait until Monday for a response. I choose to look like an idiot here. I've done it here before.

Thanks.
 
jnbadger said:
They are all over the place lately, but I'm getting conflicting information.

In my 57 exam, the rule was that when a stock was down 10% or more the previous day or the current day, you have to short on an uptick.

Sterling is good about this. Sometimes I'll try to hit the bid to get short, and the order will automatically go to the offer. But there have been other times recently when I'll just try it and I'll immediately get short on the bid.

Have the rules changed? Yes, I've thought about calling Finra, and I don't want to seem like an idiot to my compliance department and wait until Monday for a response. I choose to look like an idiot here. I've done it here before.

Thanks.
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I would call compliance. You don't look like an idiot for asking questions no matter what. You look like an idiot for violating rules or for doing reckless things.
 
newwurldmn said:
I would call compliance. You don't look like an idiot for asking questions no matter what. You look like an idiot for violating rules or for doing reckless things.
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Thanks, I will. I will also look over the docs which persistence provided. They all look like they were updated very recently.
 
Shorts used to have to be accomplished on an uptick. It was even called the uptick rule. You might just want to search the uptick rule to see if it still exists.
 
https://www.lightspeed.com/active-t...ck-rule-aka-short-sale-restriction-explained/

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The rule states that if a stock falls 10% from the previous day’s close, the only way to short it is on an uptick. In other words, traders are not allowed to short this stock while it’s falling. The only way to get short is to wait for the stock to go up (hence: uptick). This restriction applies through the end of the trading day and for the following trading day as well.

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ajacobson said:
https://www.lightspeed.com/active-t...ck-rule-aka-short-sale-restriction-explained/

That is the replacement - the rule is gone and moves to reinstate it have gotten no traction other than petitioning in mid-2020.
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Who was in favor of it Leon Cooperman, well know hedge fund manager who got badly short squeezed in GME, use to babble for its restoration on CNBC. Then there some old line Wall Street firms who resented that the public was on the same level playing field as their market makers who are exempted from the uptick rule.
 
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