Short-selling faces clampdown by SEC
- Thread starter rgowka1
- Start date
Quote from Tide31:
This is a really poorly researched article with several untruths. 'Naked' short-selling?? There is absolutely no such animal in ANY US market - Equity OR Fixed Income. I think John Labate was high when he wrote this! Rules different on NYSE then for NASDAQ, what is he talking about? Both have a 'bid test' or better known as 'plus tick rule' and both trade in increments of 1 penny. Thin stocks are impossible to borrow, and as far as enforcement - if you are the executing broker and your customer doesn't have a locate, YOU the broker are screwed. He does not make 1 valid point in this article. If anything, the rules regarding shorting will be relaxed and NOT tightened! He mentions three companies who's CEO's are pointing to short-sellers? How 'bout the 100's of 'dot.coms' that we all lost $ in that were impossible to borrow. Remember PALM??
I do agree with you but you are wrong about one thing. The rules in regards to short-selling are different on the NYSE and the NASDAQ. A NASDAQ small cap or micro cap(Must be labeled or identified by the NASDAQ) doesn't have to meet any "Bid test" or "Plus tick rule". It's a little known rule that is always ignored by trading software. It works through Instinet terminal and I believe a redi plus terminal(Not 100% sure). The only problem, as you stated, is that most of these stocks are short sell restricted and almost impossible to borrow.
Quote from ryanmitcho:
quote from the article:
mortage lender FARMER MAC?? (Freddie Mac fools!)
ps- short Fannie Mae- its a dog with fleas
Actually, the article is correct. There is a gov. agency named Farmer Mac. They finance loans on agriculture.
www.farmermac.com
The article refers to 3 companies shorted by Gotham Capital Partners. The only problem with their positions was that they chose to publicize them, allegedly to benefit their existing position. This was poor judgement on their part. They have since liquidated and their actions and are being scrutinized by regulators.
This type of "proposed action" usually comes after a prolonged period of selling. So many have lost money that there needs to be someone to blame and hold accountable other than themselves. Let the traders daytrade and allow the investors to do the appropriate level of fundamental research. Once the problems surface regarding the lack of liquidity that would result from a one sided market, these ideas will be cast aside.
The unintended consequences from anything close to this proposal would be disastrous for the small investor, let alone many institutions.
This type of "proposed action" usually comes after a prolonged period of selling. So many have lost money that there needs to be someone to blame and hold accountable other than themselves. Let the traders daytrade and allow the investors to do the appropriate level of fundamental research. Once the problems surface regarding the lack of liquidity that would result from a one sided market, these ideas will be cast aside.
The unintended consequences from anything close to this proposal would be disastrous for the small investor, let alone many institutions.
after the crash of '29, witch hunt like government activity occured to find and punish the unamerican short sellers who obviously caused the debacle. looks like history is repeating.
enjoy !
surfer
enjoy !
surfer
Oh, how right you are. I hope everyone here will take it upon themselves to write/call/pester the SEC and/or your members of congress before they embark on this ridiculous crusade. It just never ceases to amaze me the ignorance and lack of historical perspective the government as a whole possesses.
Quote from marketsurfer:
after the crash of '29, witch hunt like government activity occured to find and punish the unamerican short sellers who obviously caused the debacle. looks like history is repeating.
enjoy !
surfer