The Uptick Rule - Your Thoughts

Quote from patchie:

Isn't this about the Uptick rule? Would reinstating the uptick rule somehow be a major impediment on short selling? it is not like they banned short selling all together or anything.

BTW...have any of you ever wondered whether there were some rogue short sellers who abused the privilege and that is why these changes are being considered?

I find it quite amusing that to short sellers CEO's are all bad, long investors are all morons that can't determine rational price discovery (only short sellers can), and pump and dump is the only mechanics of stock manipulation. what bubble world do you guys live in. THERE ARE CROOKS amongst you.

There were regulations (SarBox for example) targeting corrupt CEO's and there have been regulations created to prevent pump and dumps, why the crying when there are regulations to reel in bad short sellers?
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The concept of "bad short sellers" etc. is totally absurd. In the first place, every short must be bought back, which creates buying pressure. In the second place, all stocks have a fundamental value based on the business prospects of the issuing entity. The stock market is not just a casino, and it's a fantasy that aggressive short sellers can "manipulate" stock prices below fair value, en masse, for more than a few hours or a day.

Can you do it temporarily or on individual issues? Sure. But then that's a great buying opportunity for speculators and fundamental/value investors, and the shorts will get squeezed.

Fact is, I suspect a new uptick rule would just create arb-worthy inefficiencies that can be exploited by hedge funds, IBanks, market maker firms, etc. The profits realized from this activity come from Average Joe's 401(k), and we'll have the government to thank.
 
patchie, with all due respect, anything that crimps the black box frontrunning is ok by me.

You folks have taken all the 'fun' out of trading.
 
Quote from risktaker:

Having an uptick rule is no problem. The problem is that the big players with money will be able to manipulate the market more and have a bigger advantage compared to the small players.

Big hedge funds/market makers and others will just have another weapon to skin the daytrader.
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Are you kidding me?

They got rid of the uptick rule for that purpose. SEC bringing back the uptick rule would be the only time they ever did anything in favor of the daytrader.

I know most whining do not daytrade & never have. But those that do or have, you guys must have lost your brains.
 
Quote from Specterx:

The concept of "bad short sellers" etc. is totally absurd. In the first place, every short must be bought back, which creates buying pressure. In the second place, all stocks have a fundamental value based on the business prospects of the issuing entity. The stock market is not just a casino, and it's a fantasy that aggressive short sellers can "manipulate" stock prices below fair value, en masse, for more than a few hours or a day.

Can you do it temporarily or on individual issues? Sure. But then that's a great buying opportunity for speculators and fundamental/value investors, and the shorts will get squeezed.

Fact is, I suspect a new uptick rule would just create arb-worthy inefficiencies that can be exploited by hedge funds, IBanks, market maker firms, etc. The profits realized from this activity come from Average Joe's 401(k), and we'll have the government to thank.
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"The concept of "bad short sellers" etc. is totally absurd. In the first place, every short must be bought back, which creates buying pressure." That is the most asinine comment being placed out there. Every long being purchased must also be sold which creates sell pressure. Both are a matter of WHEN. And with more longs than shorts, there is more sell pressure than buy pressure.

Abusive short selling (selling with aggression into the bid to manipulate prices down) and then buying the stock back at the manipulated prices is not "good for the markets" it creates fraud and losses to those who were driven out of their position in fear.

The rest of your arguments are just as moronic.

Do you have issues with the pump and dump? A pump and dump is the mechanics of manipulating the prices upward and then selling into the manipulation. You should not care about such because it becomes an investment opportunity for teh short seller.

Finally, fair value. Who defines that? You, me, SAC Capital, who? Is a hedge fund (or concerted group of funds) wiping out every bid in a frenzy creating fair value?

If the shorts want unrestricted trade, I say get rid of all rules to manipulation and have it a free for all. Certainly there are plenty of regulations to deter upside manipulation but...short sellers want free control on the sell side. so lets open up the markets and just let the best men stand.
 
Quote from giggollo:

I think we should have a downtick rule. Buying should only be allowed on a downtick.
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Exactly. SEC needs to clamp down on abusive long buying which should be as dangerous and harmful in creating market bubbles as abusive short selling that helps them burst fast.
 
Quote from patchie:


Abusive short selling (selling with aggression into the bid to manipulate prices down) and then buying the stock back at the manipulated prices is not "good for the markets"
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How is it different from buying with aggression into the ask to manipulate prices up and then selling the stock at the higher price? Isn't this how the markets work?
 
Federal prosecutors, in a case that remains open against Thomas Badian but has been dropped against his brother Andreas, charge in the complaint that Andreas ordered brokers to sell Sedona shares short with "unbridled levels of aggression." After the stock had "collapsed," according to the complaint, he congratulated the brokers on a "good job" and instructed them to be "merciless" in selling the stock a day later.


These were short sales and they were sold in violation of short sale policies on locates and they were sold in violation of the Uptick rule.
 
Quote from gkishot:

This case will be dropped as well.
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You clearly missed the point.

And the case is not being dropped. The brokers are likewise up on charges. The DOJ has the audio recording of that conversation and the "intent" of the trading.
 
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