Wondering which (if any) Prop. firms are still offering bullets to their traders after what the SEC came out with today. Is this new rule street-wide?
well - i know of a firm or two that carries a massive long inventory - so they are net long many stocks -- then stocks can be sold without a downtick ......
Being long inventory offset by puts lasting longer than 5 days would probably work for a very short while. Notwithstanding the fact that they would cost a lot of $ to maintain, it would still IMHO run contrary to the spirit of this interpretive letter which is that the SEC seeks to end the practice of shorting on downticks thru the use of riskless long positions. It was a gray area before..now no more. Seems like for short oriented traders, the alternative would be to migrate to NAZ since from what I've heard it is easier to get a short off than listeds.
It was gray to those that enjoyed the benefits. It was always an obvious avoidence of the rule. Same as cross collateralized accounts holding opposite positions.
Quote from honus: Does this SEC Release on Rule 3b-3 and Married Put Transactions affect the credit spread strategy? What strategy exactly? I know what a credit spread is, but how does it relate to this?