Well it is definately a sad week for daytraders all around. Most of my money was made shorting stocks(almost 5 years now) but I for one am trying to look at the positives that could come out of this. Like now if I am long the market in the morning and my stocks start gapping up, I won't have some short a@@hole who missed the boat try coming in and whacking my bid to cause panic selling so he can make 40 cents. As a matter of fact I (we) will be only fighting with other longs now to wack a bid instead of people shorting our bids for a false move down. Don't get me wrong I used to do all the things I described but I lost more money by being the long guy getting F'ed on a print than I ever made by being the A#$hole shorting in front. Just my TWO CENTS
Except that the stock wouldn't go down 40 cents unless it was either rising on a bubble or completely lacked buyers with conviction (which ultimately still means that its rising on a house of cards). This is also what helps keep the market in check. Now with fewer shorts, it becomes closer and closer to a pyramid scheme.
not so sure no matter what id rather deal with 1 guy who controls most of the action to 100 market makers with different agendas,
Well the buyer would back away and the specialist would fill everyone 40 cents down, then the buyer steps back in and the stock resumes trading!!! Tell me you have never seen that happen
That's not a "false" move down. If the buyer can step away and get the stock for 40 cents lower, then that single buyer is all that is holding the stock up, obviously doesn't have all that much to buy, and deserves to buy the stock 40 cents lower if if everyone is rushing to sell it to him/her down there. Once again, making it harder for people to short only makes the market closer to a pyramid scheme.
But, with all the clowns selling short after a gap up, plus all the longs.... the selling pressure, temporarily, becomes more than it normally would be; thus afording the buyer and the specialist to back away and get shares cheaper before resuming there buying. Without the Shorts coming in, the only people looking to hit,smack etc..... the bid are people long. Knowing that people are trying to push the stock down the buyer backs up for a few minutes, the specialist knows it, and fucks all the shorts as well as all the longs who just hit market because all the shorts smacked the bid. So in a nut shell that is a false move!! Without bullets stocks will be smoother