shorting question
- Thread starter babe714
- Start date
You need to study up on the uptick rule.....
On listed stocks, there has to be an uptick before your order executes.
On Nasdaq stocks, there has to be an uptick, but your order can be the uptick. Thus, you would need to enter an order 0.01 above the inside bid.
It can still be tough to get filled sometimes.
On listed stocks, there has to be an uptick before your order executes.
On Nasdaq stocks, there has to be an uptick, but your order can be the uptick. Thus, you would need to enter an order 0.01 above the inside bid.
It can still be tough to get filled sometimes.
On listed,you need a plus tick or a zero plus tick.On nasdaq,you just need an uptick bid.So therefore,it is easier to short a nasdaq stock.To add,nasdaq small cap stocks have no short sale rule.You can short on upticks or downticks.
Personally, I never short that way but there's nothing inherently wrong with it. It's just hard to get filled because of the uptick rule. If the stock is really selling, you probably won't get an uptick. If it isn't, you might get filled just as it reverses and runs up again.
I usually use one of two methods to short. 1. If the stock has a decent spread I put in an offer below the current low offer. I then become the low offer and will be matched up with the first market buy order that comes in (provided there was an uptick). 2. Put in my offer above the current low offer at a resistance point (take your pick here: intraday high, various moving averages, the figure, etc., etc.) The idea here is to pick a natural reversal point and hopefully with some luck I get the high print before the stock tanks. (At least that's the theory.
)Because of the uptick rule (and I'm talking only NYSE here 'cuz that's what I trade) it's nearly impossible to short a stock that's already on it's way down. You have to anticipate a little and hope you read the indicators correctly.
