Ways to short if you can't short

TO short a dow stock,
execute a basket order to buy the other 29 components outside of the stock you want to get short, then short the same dollar value of YM contracts.
 
Quote from m22au:

Here is a reference list. Please add to it if I have missed anything.

-- Stock specific --

(1) Short in the money calls and get assigned.

Note to Chris Cox: Will you legislate for a mandatory buy to cover if call writers are assigned?

(2) Short calls

(3) Long puts

(4) Single stock futures

* have huge spreads
* cannot be traded outside of regular hours
* only exist for some larger cap companies

-- Not stock specific --

(5) Sell index futures

(6) Long inverse ETFs

(7) Work for CNBC as a cheerleader for the stockmarket.
More...


Just form a trust and trade from it any way you wish... break any rules you want...

Better yet form a liquidating trust as they and their trustees are excluded from many rules and laws.

Distribute the profits and terminate the trust...
Start a new liquidating trust... repeat.


Boiler plate trust agreements... $5 recording fee $10.
Liability protection.... priceless
 
the problem of using options to go short is that when the rule is enforced options spreads are likely to go much higher because the market makers wont be able to hedge...
 
version 3, updated following SEC publication of rules:

http://www.sec.gov/news/press/2008/2008-211.htm

Please add to it if I have missed anything.

-- Stock specific --

(1) Short in the money October calls and get assigned.

If the rules are extended beyond 2 October, then it may be necessary to short calls that expire after 19 October.

(2) Short calls (regardless of assignment or not)

(3) Long puts

(4) Single stock futures

* have huge spreads
* cannot be traded outside of regular hours
* only exist for some larger cap companies

(5) Trade on the stock market of a country whose regulators (UK, USA) aren't communist morons.

(6) Short a company that is not one of the 799 on the list

-- Not stock specific --

(7) Sell index futures

(8) Short ETFs not on the list (eg. XLF)

(9) Long inverse ETFs
http://etf.stock-encyclopedia.com/
http://etf.stock-encyclopedia.com/category/bearish-etfs.html
http://tradermike.net/2007/03/list_of_inverse_short_bear_etfs_/

(10) Wait until 2 October for the ban to lapse.

and will terminate at 11:59 p.m. ET on October 2, 2008. The Commission may extend the order beyond 10 days if it deems an extension necessary in the public interest and for the protection of investors, but will not extend the order for more than 30 calendar days in total duration.

start 19 Sept + 30 days = Sunday 19 October.

(11) Work for CNBC as a cheerleader for the stockmarket.
 
fundamentals of US is still strong...that's why we nationalize everything.


by the way - maybe John is talking about his dick...lol
 
Quote from discepolo:

the problem of using options to go short is that when the rule is enforced options spreads are likely to go much higher because the market makers wont be able to hedge...
More...

MMers are exempt, but the perception of a more difficult hedge will likely widen spreads.
 
The UK Financial Services Authority (“FSA”) has issued a prohibition on short sales in approximately 40 UK-listed Financial Services Companies. The prohibition is complex and refers to any trading strategy that is economically equivalent to a short sale, and therefore applies as well to derivative strategies such as put option purchases or call option sales.
 
Jim Chanos, chairman of the Coalition of Private Investment Companies, which represents 20 funds with assets in excess of $120 billion. “Such a requirement is akin to the government suddenly requiring Coca-Cola to disclose their secret formula for free to all their competitors.”
 
We have been told by SEC Chairman Cox that the SEC will extend the exemptive relief for Options Market Makers from the temporary order prohibiting short sales in the financial stocks. That would mean that the same rules will apply on Monday.

From a major Chicago OMM/DPM
 
I am hearing that Brodsky flew out to D.C. to take care of this exemption for us.

I am 90 delta that we will not be dead fish in barrel come Monday.

nitro
 
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