http://tickersense.typepad.com/ticker_sense/ Banks are running their own hedgefunds, and are one in the same.
LOL. What a crock. In 2000 I watched many stocks lose 20% in a day with the uptick rule in effect. Uptick...no uptick. It doesn't make any difference in a bear market environment when people want out of their holdings. The real danger is that regulators love to regulate, particularly when they feel under pressure to "do something" in a falling economy. So I would be very pissed, but not surprised, to see changes discussed.
That article is worthless unless we see what the moneyflow and vix were in 2001. The market went crazy then too with the uptick rule. The only thing that has changed is that individual investors can now get short more easily. The funds always went through specialists on NYSE and mm's on Nasdaq to get large blocks short, and pro traders had bullets and conversions. This rule has benefited the individual trader far more than anybody else. I don't have a lnk, but I read a study done recently on how stock is now turned over far more rapidly than ever before, even by small traders. That has also influenced volatility as a lot less people are buy and hold.
I guess Cramer is scrambling to draw attention to himself. What exactly does the uptick rule solve? Shorters must buy their stock back which actually help the longs also, right? Underlying conditions win out anyway. I'll bet the online stock brokerages won't ever let them reinstate the uptick rule. Traders everywhere will switch to futures and forex.
If a Cramer call made someone rich from a short squeeze, he wouldn't be bitching. If a long stays in his play when it crashes from pure profit taking, is he going to blame the shorts and the removal of the uptick rule? (probably, if his name is Cramer) I used to hear rumors that naked shorting was used to destroy small cap companies. Did the uptick rule matter if that practice really existed? Others claimed it was just a way to blame the shorts for a failed company. Common in the pinks. If a company want's to fuck the shorts, all they have to do is send out an analyst with an upgrade, or call the rumor mongers at CNBC. It works both ways. If you lose money in a selloff, blame profit takers along with short sellers. Or better yet, take your stops and put your profits in the bank and wait for a better re entry. Thank the shorts for that. Leave the rule banished so traders can make a living. And for those who really hate short sellers, take heart. The undisciplined short seller can lose to nearly infinity. Long plays can only go to 0. Maybe, just maybe, these big moves are related to a world market now (just plain more players in the game then every before).
I don't fucking understand what is wrong with longs who are anti shorting. I can remember people trying to short tech crap like 8 years ago trying to call tops. They would short and get burned on the trade when they started going to even higher retarded levels. Massive squeezes bringing some stocks to insane levels. Don't you understand thats shorts bring added fuel even to long trades. It goes both ways and a give and take game.
If your a true trader you make money in both directions, long and short. That's means you need a free market that isn't stacked with biased rules, like the uptick rule (repealed July-07) and the NYSE trading curbs (repealed Aug-2007). Its bad enough to have the Fed stepping in every other day to save the markets. We certainly don't need the bullishly biased uptick rule and trading curbs re-instated, unless of course your an investor. Investors are always bullish because that's the nature of investing. The last time I checked, the name of this website is Elite "Trader," not Elite "Investor." My suggestion: If your a cheerleading Investor, go join a Yahoo investing club and leave ET to actual traders.
Getting rid of the uptick rule makes about as much sense as introducing a new downtick rule. Well what do you know I think we should write our congressmen about this rule:"You can only buy a stock on a downtick" Nobody wants this rule, its no wonder I'm switching to futures.
How do you separate the increasingly bearish news that was coming out during this chart that they show in this article. There is no proof that the change in the uptick rule changed volatility. The simplest explanation is that market news created the volatility. If they really want to make a case, why don't they extend that chart a few years back to get a bigger sample. No, I suspect they don't do that because it wouldn't suit their conclusion.
Maybe it is because they are getting spanked silly currently and are crying for mommy. You don't hear complaints about shorts when they are losing, that's for sure.