Shorting on DOWNTICK

Actually is not the question that I like to short. It's more the question of being successful in donwmarket or falling stock (like ADVS on June 11, or PEOP the day before)

Without being able to short on downtick (downbid) I actually miss the most promisable plays.

Correct? Or anything wrong with this thinking?

Lojze
 
I have spent hours studying the possibilities of being able to short stocks on down ticks. I trade some stocks that will often slide 1-2 points with no up tick. I was hoping I could get short my stock during a up trend then at the same time also go long the stock (equal position long and short) than at the first sign of blood just sell my long position riding my short position down until the bottom is found. then just get the long position back until the bleeding starts again. this can be done for as long as you want with out ever going short except for the first time. I even tried to call the SEC and discuss this. After lots of wasted voice mail messages I gave up. I have brought up this topic here at ET before and it sound like some traders have done this technique using 2 separate accounts one for the short side and one for the long side. This is illegal as far as I know. The SEC considers that you are short if your overall net position in the stock is short it doesn't matter if you are only selling your long position to accomplish this. It seems a synthetic short position using options or bullets/conversions are our only answer. I am still looking into this method.
 
Are these nasdaq stocks or nyse?

Not that I would ever do this, of course:) , but have you tried "going long to get short." ie, buying one lot, and then entering multiple sell orders.

This would violate the rules, so of course I only bring it up for conversational purposes.
 
Originally posted by Thug_Life
Are these nasdaq stocks or nyse?

Not that I would ever do this, of course:) , but have you tried "going long to get short." ie, buying one lot, and then entering multiple sell orders.

This would violate the rules, so of course I only bring it up for conversational purposes.
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Very creative ...
 
Originally posted by nasdaqmadness
I have spent hours studying the possibilities of being able to short stocks on down ticks. I trade some stocks that will often slide 1-2 points with no up tick. I was hoping I could get short my stock during a up trend then at the same time also go long the stock (equal position long and short) than at the first sign of blood just sell my long position riding my short position down until the bottom is found. then just get the long position back until the bleeding starts again. this can be done for as long as you want with out ever going short except for the first time. I even tried to call the SEC and discuss this. After lots of wasted voice mail messages I gave up. I have brought up this topic here at ET before and it sound like some traders have done this technique using 2 separate accounts one for the short side and one for the long side. This is illegal as far as I know. The SEC considers that you are short if your overall net position in the stock is short it doesn't matter if you are only selling your long position to accomplish this. It seems a synthetic short position using options or bullets/conversions are our only answer. I am still looking into this method.
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Why not; other than the huge amount of capital ...
 
If I knew it was legal to own 500 xyz short and 500 xyz long and sell my long position into weakness, I would do it. The extra capital should not be of much concern if the method worked. Think of how nice it would be to get short at will by just hitting the sell button.
 
Originally posted by nasdaqmadness
If I knew it was legal to own 500 xyz short and 500 xyz long and sell my long position into weakness, I would do it. The extra capital should not be of much concern if the method worked. Think of how nice it would be to get short at will by just hitting the sell button.
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Worst case is to setup two corporations; that is probably a gray enough area to make it legal; however if you have that kind of capital even retail bullets makes more sense.

And I am still not sure the initial idea is illegal.
 
Originally posted by rtharp
It's actually not possible anywhere. Including Professionals.....

Professional traders create an "artificial" long which they sell.

Retails can't create this "artificial" long

Robert

as someone mentioned ETF's are exempt
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Could you explain some of this 'artificial long' techniques?
I was thinking in buying the stock and an In The Money Put but is costly. Some other ideas?
 
Is the 'uptick' rule for the NYSE applicable to the Open (can you sell short at Open if Open > previous Close)?
 
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