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Uptick Rule Removal
- Thread starter tradersboredom
- Start date
Quote from zdreg:
you didn't address the issue of additional cost.
one way is not a sufficient answer. if you know post it. . if you don't know admit you don't know.
Use the Force, Luke...
http://www.google.com/search?q=bypass+uptick+rule
are you his brother?
thx for your tip to buy googleD
the poster makes a statement towards general traders. then he doesn't back it up.
Quote from zdreg:
you didn't address the issue of additional cost.
one way is not a sufficient answer. if you know post it. . if you don't know admit you don't know.
Where did I say that there wasn't a cost to it? You can't take what I say, add your own words, and claim I said it. That's not the way conversations work.
Another way: A certain major ECN allowed exemptions from the tick test in stocks listed on a certain major exchange. As long as the trades took places within the ECN's own book, there was no tick test.
There. I gave you a sandwich. I'm not going to chew it for you, though.
tradersboredom
Guest
the 1987 market crash in one day was another pre-meditated scam by wall street crooks who shorted and had put options etc.
computer crash crash the markets.
computer crash crash the markets.
Quote from FightTheFuture:
Not that I have any interest in individual stocks, the uptick rule did nothing to prevent the October 1987 crash of 23 percent in one day.
Quote from tradersboredom:
Only reason for removal of uptick rule was to make shorts money.
There was a lot more money to be made with the uptick rule in place. Both long & short, with relatively low risk.
In its prime, it was a cash cow, a great gimmick which made lots of easy money to those that would not be able to stay flat nowdays, let alone make a gross profit.
Anyway, back to the topic. The reason for the short tick rule being abolished was because it 'biased' stocks to the upside. It was removed to protect the public from 'manipulation of stocks'. If stocks trade off of 'future' earnings, 3-6 months out, then they are not too dissimiliar from futures contracts. When a futures contract opens up, noone is long it. You may have farmers that 'hedge', but they do not own the contract they are shorting. If stocks go down, it is because there are fewer buyers than sellers, period.
Stocks went down in Q4 '08 because of the dismal outlook for the future. NOT because some people shorted them. Wasn't it better that the general public bought stocks cheaper in Q4, now that we see the earnings from then coming out and the projections for Q1, Q2? Stocks adjusted accordingly, correctly at the time. If shorts helped take them to the appropriate level, how can one argue that this is counter-productive?
Reinstituting the plus tick, nearly impossible to do with .01 increments and more than 1 market (ecn's), is a flawed theory. Any arguments of self-fullfilling prophesies if stocks go down are also ludicrous. People aren't buying Blackberry's because the market is lower, or because the economy sucks? The economy sucks because stocks are lower, no, stocks are lower because the economy sucks . . .
Stocks went down in Q4 '08 because of the dismal outlook for the future. NOT because some people shorted them. Wasn't it better that the general public bought stocks cheaper in Q4, now that we see the earnings from then coming out and the projections for Q1, Q2? Stocks adjusted accordingly, correctly at the time. If shorts helped take them to the appropriate level, how can one argue that this is counter-productive?
Reinstituting the plus tick, nearly impossible to do with .01 increments and more than 1 market (ecn's), is a flawed theory. Any arguments of self-fullfilling prophesies if stocks go down are also ludicrous. People aren't buying Blackberry's because the market is lower, or because the economy sucks? The economy sucks because stocks are lower, no, stocks are lower because the economy sucks . . .
Quote from tradersboredom:
the 1987 market crash in one day was another pre-meditated scam by wall street crooks who shorted and had put options etc.
computer crash crash the markets.
You have no idea what you are talking about. I suggest you look up "Portfolio Insurance" and Berkeley professors Hayne Leland and Mark Rubenstein, and portfolio theorist and marketer, John O'Brien. (aka: LOR)
Quote from zdreg:
are you his brother?
thx for your tip to buy googleD
the poster makes a statement towards general traders. then he doesn't back it up.
His reply was just as precise as your initial statement that removing the uptick rule was bad.
BTW, as far as costs are concerned, that point became moot with the move to decimalization.
I guess it's also lost on you that the shear volume of trading today demands a decentralized marketplace, so how on Earth can anyone say that the last trade was an uptick anyway?
Quote from zdreg:
since u said that i don't know what i am talking about why should you assume i know what bulletins are.
in any case bullets were not available to the general public. they were also an additional cost.
why don't u write techniques that were available to the general public.
So if you don't know what a "bulletin" is, how can you authoritatively state that the uptick rule was good and it's removal is bad? You don't know what you're talking about.
There was nothing available to "the general public". That's the point. The price test screwed the general public and professional traders (particularly market makers and specialists) benefited at your expense when the rule was in place because it drove spreads wider. That was most true of less liquid stocks where retail investors made up a higher percentage of the trading volume. Those guys got screwed the most while in very liquid stocks the rule made no difference because there was always an uptick even when the market tanked like a rock. With a penny spread, an uptick is simply trading on the offer. So, the SEC removed the uptick rule to stop screwing the investors in illiquid stocks.
The most hilarious thing is that you Joe Publics want the thing back. If you like to get screwed, who am I to stand in your way? Bring it back.