Dump!! Dump!! Dump!! b/c of naked shorting.

Discussion in 'Trading' started by Option Trader, Aug 13, 2008.

  1. Why let them take away your money selling you an infiinite supply of computer beeps? For the moment, you have no protection from them.
     
  2. Lucrum

    Lucrum

    Let me guess, you have a long position that's getting hammered?

    Not sticking it to you over it. But you do seem to have an agenda all of a sudden.
     
  3. A posting like mine wouldn't help for an immediate need like that. Yes, I do have an agenda, that SEC should be exposed to unrelenting pressure to protect stock holders who supposedly are investing in shares of a company--because the alternative must be to provide them equal treatmet as the MM's, and to let everyone short stocks till zero.
     
  4. Bowgett

    Bowgett

    Even naked shorts have to cover some day...
     
  5. Without tightening of regulations, that isn't true. See the SHO list which goes on forever, and meanwhile they just earn interest on everyone's money--indefinitely, with enough spare to bribe certain persons.
     
  6. No. It's perpetual, and at zero, they don't even pay taxes.
     
  7. Oh christ would you people stop whining, The market worked just fine for years but now all of a sudden its a big problem because the likes of jim cramer and cnbc have nothing else to talk about.

    Stop investing in dog shit stocks and get over it.
     
  8. for someone with 1000+ posts id expect better.

    SEC short selling rule made little impact: studies
    Wed Aug 13, 2008 7:11pm EDT


    By Emily Chasan

    NEW YORK (Reuters) - U.S. regulators' emergency rule to restrict "naked" short selling in 19 major financial stocks had little impact and may have even backfired, two studies of the rule's effects showed on Wednesday.

    While overall short selling declined in nearly every firm affected by the rule, many of the 19 stocks still suffered declines in their share prices, the studies showed.

    The U.S. Securities and Exchange Commission issued an emergency order last month requiring short sellers to pre-borrow stock in mortgage finance giants Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) and Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and 17 other Wall Street firms, such as Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) and Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz). While the rule expired at 11:59 p.m. on Tuesday, the SEC had billed it as an attempt to crack down on illegal "naked" short selling, that could allow reckless short selling of the stocks.

    "While the SEC's intentions may have been good, their attempt to protect price with rule-making was quite flawed and without intended effect," said John Standerfer, Vice President of Financial Services for market data firm S3 Matching Technologies. "The market has its own mind."

    An S3 study of market data showed short sells for the 19 stocks dropped by about 63 percent while the rule was in effect, but the firm concluded the rule was "ineffective," saying short selling "did not seem to be a significant factor" in the market's determination of price for the stocks.

    Shares of Fannie Mae and Freddie Mac are off more than 20 percent since the protective rule was first announced, despite an almost 5 percent rise in the benchmark Standard & Poor's 500 index .SPX in the same period.

    Even with the protection, S3 found the number of short sells in shares of Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) were often higher while the rule was in effect than they were the day before the rule was announced. But despite the higher levels of short selling, Bank of America's stock price is up more than 40 percent in the past month.

    A separate study from Arturo Bris, a finance professor at IMD business school in Lausanne, Switzerland, found that, even controlling for short selling, market efficiency had deteriorated more for the 19 stocks affected by the rule than for other comparable U.S. financial stocks. Bris found that shares affected by the order lost about 3.8 percent of their value, compared to their peers -- a figure that translates to about a $60 billion loss for the firms' shareholders.

    "Our belief is that naked short selling was never a problem with these stocks," said Eric Newman, portfolio manager at long/short fund TFS Capital in West Chester, Pennsylvania.

    Indeed, prior to the SEC's rule only one of the 19 stocks, the U.S.-listed shares of Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) (DB.N: Quote, Profile, Research, Stock Buzz), had been listed on the New York Stock Exchange's list that tracks stocks with "fails to delivers" -- an indication of naked short selling.

    "We think the SEC are going to read into this data that a lot of short sellers exited positions," Newman added. "But we believe a careful look will show was that naked short selling was not ferreted out, but that it was regular legitimate short sellers who were closing their positions."
     
  9. Please post a list of stocks going to zero so I can get in on this.:D
     
  10. Timmay took the list with all the good ones. But he went long (sigh).
     
    #10     Aug 13, 2008