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Short Selling Restrictions Does Not Affect Markets
- Thread starter libertad
- Start date
Thanks for the link.
The ban did seem to affect markets, in one way that's not discussed in that article: bid/ask spreads skyrocketed, making these securities much more expensive for liquidity takers to trade. Unable to hedge or offer to sell without stock, many participants simply refused to make markets in these securities at that point. The result: not only did these stocks continue to plunge, but it seems that they also plunged much more chaotically than they would have otherwise.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.dumbest_moments_2009.fortune/12.html
The ban did seem to affect markets, in one way that's not discussed in that article: bid/ask spreads skyrocketed, making these securities much more expensive for liquidity takers to trade. Unable to hedge or offer to sell without stock, many participants simply refused to make markets in these securities at that point. The result: not only did these stocks continue to plunge, but it seems that they also plunged much more chaotically than they would have otherwise.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.dumbest_moments_2009.fortune/12.html
And it was MS Mack...and other IB heads barking the loudest....
Just to note these guys just blabber their books....
Pitiful.....
And was also regretted By SEC head....
Time for Mack, Blankfein....to move on....
Also lied about their effects on oil prices....in front
of government officials....
Time to clean out the rolodexes at the SEC.....
Just to note these guys just blabber their books....
Pitiful.....
And was also regretted By SEC head....
Time for Mack, Blankfein....to move on....
Also lied about their effects on oil prices....in front
of government officials....
Time to clean out the rolodexes at the SEC.....
tradersboredom
Guest
the uptick rule removal
market makers refuse to bid if shorts keep hitting the bid on downtrend or hitting the bid on weakness.
market makers don't have limited cash.
market makers refuse to bid if shorts keep hitting the bid on downtrend or hitting the bid on weakness.
market makers don't have limited cash.
Quote from Euler:
Thanks for the link.
The ban did seem to affect markets, in one way that's not discussed in that article: bid/ask spreads skyrocketed, making these securities much more expensive for liquidity takers to trade. Unable to hedge or offer to sell without stock, many participants simply refused to make markets in these securities at that point. The result: not only did these stocks continue to plunge, but it seems that they also plunged much more chaotically than they would have otherwise.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.dumbest_moments_2009.fortune/12.html
tradersboredom
Guest
majority of short positions are professionals who work for hedge funds/brokers/market makers.
trading against client is part of their business model.
as for the SEC, SEC is as useless as market makers these days, have no worth in the market place.
you can get rid of the SEC and market makers and the market will still function.
trading against client is part of their business model.
as for the SEC, SEC is as useless as market makers these days, have no worth in the market place.
you can get rid of the SEC and market makers and the market will still function.
Quote from Euler:
Thanks for the link.
The ban did seem to affect markets, in one way that's not discussed in that article: bid/ask spreads skyrocketed, making these securities much more expensive for liquidity takers to trade. Unable to hedge or offer to sell without stock, many participants simply refused to make markets in these securities at that point. The result: not only did these stocks continue to plunge, but it seems that they also plunged much more chaotically than they would have otherwise.
http://money.cnn.com/galleries/2008/fortune/0812/gallery.dumbest_moments_2009.fortune/12.html
Quote from tradersboredom:
market makers refuse to bid if shorts keep hitting the bid on downtrend or hitting the bid on weakness.
If everyone is selling, then it seems that the price should go down. As in the case of many of these financials -- the price did go down, as it should have, even with the short sale ban. And the end result was exactly what it should have been for any other bankrupt/nearly bankrupt company -- but the short sale ban seems to have made the descent more chaotic than it would have been otherwise.
Short sale bans impede orderly markets and price discovery. I think it's abundantly clear that this one failed to accomplish anything positive.