Shorting of stocks should be banned like Japan. It has no purpose but to rob people's hard earned money. You do not like a stock sell it but you should not be able to drive down its price and rob others of their gains and wealth to enrich yourself. Its unjust enrichment.
You seem knowledgeable enough about market history, yet ignorant of market mechanics. The market makers want the uptick rule. That way, they get to be the only ones short. The removal of the uptick rule was a victory for the small guy. That's why Cramer is against it. He is for the big players and is really the enemy of the average Joe.
HedgeFundTrader? How about a new nick like CluelessPiker#1 When you short a stock you are selling it. You are betting you can buy it back for less because it is overvalued. Get a clue.
I found it hard to believe, so I went to the CNBC website and replayed the segment. Imo people should step back and reason about the suggestion and not let passion and emotion cloud our judgement. Let's consider facts: 0) The ut rule never stopped traders from shorting a stock. When the ut rule was in place, traders got bullets and conversions that while a little more expensive, allowed the same "bear raids" Cramer claims. It did not stop the meltdown of the markets in 2001, and the ut rule was in place back then. 1) Very few stocks are targeted for bear raids. In fact, the recent downturns have been on entire sectors, and a great deal of the selling is in the ETF of that sector, which then drive down the stock by the market makers in the stocks through the act of hedging. When a stock is singled out and driven down hard outside it's sector performance, it is because there is real cause that the stock is highly overvalued, or there are real cause for concerns. The problem is not the ut rule in this case, it is that the would be buyers agree with the sellers and only demand the stock to buy when the risk and rewards are seen to be matched. 2) Removing the ut rule shifts the market back into an asymmetric state, where supply and demand on the stock gets skewed, at best artifically. That caused all sorts of problems too before the ut rule was removed. Basically, it makes the stock market a pyramid scheme where you make money on the greater fool theory. People like Abbey Joseph Cohen and Jack Grubman etc would be back on the job with price discovery far more difficult in the market. 3) Without shorts, no one is on the other side of your trade providing liquidity, except for the greater fool theory. That means in fact that most investors are hurt, not helped ,as that makes ownership of the stock more expensive not less expensive over time, because price does not represent value. Finally, I don't understand Cramer's logic. For someone that has a show twice a day, every day, and supposedly the people that watch the show are able to make decisions on investments on a daily basis, and comissions for the typical investor at rock bottom prices, why on earth would you ever want the ut rule abolished? My gawd man, if someone drives down LEH 50% on a bear raid without regards to fundamentals, wouldn't you be licking your chops to buy it Let them abolish the ut rule. It will just make people go to Single Stock Futures or equity options (sell call buy put is synthetically short stock). The NYX will be a warehouse within two years as option ECNs like the BOX or ISE become prevalent. nitro
Selling (whether Short or plain Selling) is Wrong and Un-American. All selling should be Banned. One should only be allowed to Buy Stock or to Exchange it for another one. This way the stocks will only go up or stay flat. We all will become winners! I Repeat, Thou ShallNot Sell!
For those that don't know what this is, I should provide a reference: http://en.wikipedia.org/wiki/Bigger_fool_theory People that only go long stocks that aren't value investors like Warren Buffet, make their money on the greater fool theory. These are the people that want the ut rule reinstated. nitro
Well said, Mr. Turkeyneck ... ----- Someone mentioned 1934. Do not forget that investors, not short-term traders ... INVESTORS, had 10 to 1 overnight leverage back then. Dialing the overnight leverage down to 2 to 1 for the generic investor was more infinitely more important than the uptick rule, and Cramer knows that. On naked long or naked short positions, I doubt that you could get 10 to 1 overnight at Assent, Bright or Echo - and these are firms that are in the business of providing leverage and other services to professional speculators.