They just banned short selling in US
- Thread starter nitro
- Start date
I am not going to call obviously smart people stupid. I think what they did was an act of desperation.
These people realize they need to be dynamic in a highly fluid situation, and they will find the right compromise in the short term. Their goal is not to bankrupt the liquidity providers. That's silly.
I believe this is a kind of MARTIAL LAW
http://en.wikipedia.org/wiki/Martial_law
imposed on financial markets. It is extremely painful, but in the short term probably has to be done.
nitro
These people realize they need to be dynamic in a highly fluid situation, and they will find the right compromise in the short term. Their goal is not to bankrupt the liquidity providers. That's silly.
I believe this is a kind of MARTIAL LAW
http://en.wikipedia.org/wiki/Martial_law
imposed on financial markets. It is extremely painful, but in the short term probably has to be done.
nitro
As far as bringing back the uptick rule, I think it is a catastrophic mistake. I will be shorting NYX and buying CME if they do. Volumes from automated equity programs, which accounts for something like 60% of NYX volume, will implode.
I don't know what the ultimate solution is. To be frank, not allowing any one institution to take on more than 10:1 leverage would probably solve every problem we are in, and there would be no need for the domino effect of unprecedented rules against market participants that insane leverage has caused.
When people say there should be less banks, I say there should be more. Spread the risk out as much as possible. Don't allow any one institution to get out of control. Create an exchange for things like CDS and CDOs. Make it illegal for institutions to create products that can be traded away from an exchange.
nitro
I don't know what the ultimate solution is. To be frank, not allowing any one institution to take on more than 10:1 leverage would probably solve every problem we are in, and there would be no need for the domino effect of unprecedented rules against market participants that insane leverage has caused.
When people say there should be less banks, I say there should be more. Spread the risk out as much as possible. Don't allow any one institution to get out of control. Create an exchange for things like CDS and CDOs. Make it illegal for institutions to create products that can be traded away from an exchange.
nitro
It's not about exempting anyone that is being FORCED to make markets. It should be about anyone that is increasing liquidity by creating convergence in call/put parity, SSFs, etc. It's the ORDERS and OPEN INTEREST that provide the true liquidity and price discovery. If you make someone pay $3 to convert off their long stock, volume will just implode. I trade as many as 50k contracts/day in a portfolio margin environment, all in a delta-gamma-vega neutral model. Exempting market-fakers and not people doing similar trading is an economic injustice which will only line the pockets of the whining, trade busting, "whopping 20 up" market fakers.