Blocked Shorting

Discussion in 'Trading' started by Avid_Consumer, Apr 12, 2007.

  1. http://www.guardian.co.uk/wtccrash/story/0,,552568,00.html

    "The Fed, supported by the banks, will buy equities from mutual funds and other institutional sellers if there is evidence of panic selling in the wake of last week's carnage.

    The authorities are determined to avert a worldwide slump in share prices like the crashes of 1987 or 1929. Investment banks and their broking subsidiaries are to block short-selling by speculators and hedge funds by making it hard for them to obtain prices on favourable terms. "


    any ideas on how this would be accomplished from a technical perspective
     
  2. 2nd question, is it legal to do so
     
  3. Can't say on either question, but doesn't look like it worked too well in 2001.

    BTW, has the Fed and the IBs ever stopped doing that since 2001? Rumors say no.
     
  4. nassau

    nassau

    they just make short shares not available.
    many times I have shorted a stock @ x as I scaled into a short position to find that once I wanted or needed the shares they were not available.
    By the time the broker gets shares which will allow them to allow me to short the opportunity is usually gone.
    One way to eliminate this is to arrange previous with you broker your desire they will allow you to short for an additional fee
    The broker can deny you short shares still at their discretion let alone hold an ace and call the shares.

    w
     
  5. that makes sense, i've definitely had that experience. if it's a concentrated, organized effort between the fed and banks/brokers to disadvantage shorts, is it legal?
     
  6. Big AAPL

    Big AAPL

    I'm sorry, but I don't know how to quote, this is in reponse to nassau's last post. Did you say that a broker will let you short for an "additional" fee? What type of fee is that and what is it called?

    It sounds eerily similar to a "deal" I was once offered by a slicked up, scotch swilling, stock guru wannabe I met down Vesey street one day...

    Seriously though, what additional fees?
    Could someone explain please?
     
  7. nkhoi

    nkhoi Moderator

    just click
     
  8. It seems to me there are all kinds of ways to screw participants, especially shorts. Crossed markets where you can't get long/short/cover. Exchanges experiencing "technical problems". Shares simply not available to short. Hard squeezes to scare the crap out of the shorts. You name it, wall st knows the trick.
     
  9. if it's in the working group on financial markets' "red book" or their minutes, then it seems there could be a legal case

    for the heck of it, i did contact the joint economic committee and Ron Paul's office in the last week. this level of transparency doesn't seem to be desired outside Representative Paul's office at this time
     
    #10     Apr 12, 2007