I assume that you are not a trader, as no sane trader will support the uptick the rule. Elimination of this rule was the best thing that ever happened to our industry and made it a fair game.
a suggestion for you: Go to thestreet.com and do a search on Cramer and Uptick rule, I think Cramer gives a number of reason why retailed investors get hurted by the elimination of the uptick rule. Cramer used to be an institute investor and he knows the secrets the hedge funds used to take advantage of the uptick rules.
Since you are not a professional trader, there is no point for me to further this discussion. Good Luck..
I totally disagree. And yes, I am a professional trader and one who used to be a floor trader in #4 WTC. The VELOCITY ( not "volatility" ) of price movement in the market has gone to such incredible levels that portfolio managers, traders, etc. are no longer able to humanly "process" the data that they are seeing. Ever seen a market in the electronic "age" drop 200 points in the last 7 minutes of trading before 2007? Ever think that the selling wasn't all from natural sellers? Think the inverse ETF funds benefit from the lack of an "uptick" rule? How about the equity derivative desks at the investment banks that "facilitate" customer orders and trade against the customer? Cox is yet another Bush appointee "failure" . . . just like Rumsfeld and most of the other cabinet members. No leadership whatsoever. Just the same old passive "free markets for free men" instead of "free and FAIR markets for free men" mantra that lead to the "Commodity Futures Modernization Act of 2000" and the special interests that were ALLOWED to get away with financial murder. For example, who in their right mind would allow the West Texas Intermediate crude oil futures contract to trade without CFTC supervision and regulatory control over in London and Dubai? Interesting how the Pro Fund Ultra Bear ETF's came out in the summer of 2006, and about six months later the "uptick" rule was eliminated. Hmmmmm....
Cramer has an interest for the market to go up to save his portfolio, but SEC have no mission for the market to go up. SEC should not care if you make money or not. But uptick rule is not fair. Period!
He knows the 'secrets' alright....... Talking Up His Own Book Robert Lenzner and Victoria Murphy, 03.01.02, 7:10 PM ET NEW YORK - Legendary hedge fund operator and confrontational television commentator James Cramer has been getting publicity from news that he's working on a juicy Wall Street story: his own biography. But the real dirt might be elsewhere. In a soon to be released tell-all tale, former Cramer & Company employee Nicholas Maier accuses TheStreet.com's co-founder of using CNBC anchors and his own television appearances to promote stocks that he would promptly sell, making a quick gain on the upswing. In Trading With the Enemy, to be published this month by Harper Business, Maier alleges that CNBC anchors Maria Bartiromo and David Faber were used like pawns to talk up stocks that Cramer's hedge fund had purchased. He did this by giving them heads-up on analysts' upgrades and downgrades in particular stocks. Writes Maier: "We were the first firm most brokerage houses told such news [of upgrades and downgrades], and Jim decided to use this early-call status to help the reporters, who all wanted to break a story." Maier goes on to explain that after the stocks were touted on television, Cramer would promptly dump the firm's position: "No sooner would Maria be thanking us for the help than we'd be getting a payback--a quick hit thanks to our friends at CNBC." In one case, recalls Maier, Faber called Cramer and immediately Cramer demanded that the firm buy a hundred thousand shares of MCI Group (nasdaq: MCIT - news - people ). "There will be news!" said Cramer's colleague to the broker at Goldman Sachs, who also purchased shares. No more than an hour later, Faber went on the air with news that telecommunications giant MCI was rumored to be an acquisition target. Maier admits he does not know what Faber actually told Cramer during their conversation and writes, "Reporters often called us, asking if we could confirm a rumor in the marketplace." Cramer's own television appearances also were used to intentionally sway the markets in his favor, Maier writes. For example, while Cramer was on CNBC promoting "a great investment for the long term," Maier writes that Cramer's firm was making quick gains: "Our real strategy, however, was all about taking profits now. Back at the office, we were supposed to dump stocks after a quick half-point gain. On TV, Jim would tout a stock we owned, but if it moved up, we would sell." "Jim would do the opposite of what he was saying on television," Maier told Forbes. Cramer did this behind the scenes too, says Maier. "He would hear rumors, pass them on and then do the opposite," adds the author, who insists that he has the trading documents to back up his claims. Maier worked under Cramer between 1994 and 1998. Why put himself on the line? Not for a hefty book advance: "Mine is trivial compared with Jim's $1.5 million," says Maier. "My goal is to show people how Wall Street really works. It left a very bad taste in my mouth." Cramer used investment banks to get quick gains too, according to passages in the book. Maier details playing pool with one analyst from Salomon Smith Barney who, while polishing off a third beer, hints that his firm was going to make a rating change on a specific company. Sure enough, by the time the stock had been upgraded to a "strong buy," Cramer & Company had purchased 50,000 shares--all executed with Salomon at the urging of the analyst, who said Salomon landed a cut on the trade. Both sides had incentives to "leak" information. Cramer & Company made a quick profit, and the investment banks landed commissions on the trade. This way, both sides had incentives. This kind of activity was widespread, says Maier: "Analysts at every one of the major brokerage houses were doing this." Maier describes arrangements Cramer & Company made with the investment-bank underwriters of "hot" IPOs during the late 1990s: "Nearly all of the major investment banks made us commit to after-market orders, and they kept score .... This was their way of making sure hot deals stayed hot." By buying ten times more shares than their allocation on the offering, Cramer & Company were helping to drive the price of deals even higher in the stock market. Maier writes that time after time, "I would give the brokerage house 50,000 shares to buy on top of the five [thousand] they gave us." "It was the brokerage houses that created a facade of legitimacy to manipulate the situation, and ultimately it was the little guy at home, not fully comprehending the process, who bought these stocks at an assuredly inflated value," Maier writes. Cramer is not new to accusations of recommending stocks in his own portfolio. In 1995, he was investigated by the Securities and Exchange Commission for touting stocks that his firm held positions in. The matter ended with no action. Cramer was unavailable for comment. Maier claims that Cramer twice attempted to legally thwart the book from going to press. The SEC also declined to comment on the book's allegations. On Friday evening CNBC issued the following statement: "CNBC has the highest journalistic standards in the business. Any insinuations [that] our reporters' journalistic practices have been anything less than completely ethical are outrageous. These accusations are filled with innuendo and insinuation. They portray as improper, routine phone calls that may or may not have happened. David Faber and Maria Bartiromo have the utmost integrity. They have always operated with the highest of standards. We have discussed the accusation on the five pages we've seen with Jim Cramer and he has told us that these charges are completely unfounded and that they are leveled by a disgruntled former employee of his who he dismissed for poor performance." http://www.forbes.com/2002/03/01/0301cramer.html
The problem is not the uptick rule. The problem is the outdated regulatory agencies. SEC has authority over the equity market, and CFTC for the derivative market. A lot of structural products have been invented so these two markets are closely coupled. US needs a new agency to oversee both markets.
idiot! anyone who just quotes jim cramer is another stupid lemming. "Booyha ski daddy". do you just watch jim cramer and think u can trade? ive never seen a good trade quote jim cramer. on a side note did anyone see Erin Burnett call jim cramer out around 2:45 on tus about the uptick rule? she actually had facts. NOTHING you or JIM cramer have. can anyone even name 1 stock that would be higher if there was still a uptick rule? just give me 1 stock. everyone loves to complain about the uptick rule, but how about the 2 trillion $$ in bank writedowns and 40-1 leverage
I am well aware of what the SEC and the CFTC has jurisdiction over. The U.S. does not need yet another bureaucratic federal agency. It just needs the people in charge of their respective "agencies" to do their job and enforce the rules that are already on the books! Christopher Cox has been asleep at the wheel. His response to "naked" shorting ( a few months ago ) is a great example of his negligence and lack of leadership.
Once again, the reading comprehension that is displayed on ET is highly questionable. The issue is not about the stock prices of companies going lower in a bear market. The issue is not about bank write downs or the amount of leverage used on the balance sheets of institutions. The issue is whether or not the elimination of the "uptick" rule has lead to an increased VELOCITY in the marketplace which has gotten to the point where human beings are no longer able to "process" the price data that they are seeing before them. I would suggest that the VELOCITY of prices has been significantly increased by the lack of an "uptick" rule. Anyone who knows how inverse ETF's work or how program trading can impact the market would agree with this point.