uptick rule didn't prevent the last bear market and this naked shorting thing won't stop this one. Big HF's can and do use TRS and other derivatives to express their views.
Sorry Beaker I meant trading will get back to normal. Bear raids, markets going both up and down in the same day. I don't really have a bias about whether the US will go into recession or not, if it does "most" of it should be priced in. Jobs and corporate proftis have held up pretty well considering this is the mother of recessions. May still happen but IMO its a little overhyped remember bird flu.... and who could forget that the world was going to end in the year 2000 [or at least come to a grinding halt] as well. Cheers
This is a non-issue since you can sell one of the 856 single stock futures, construct an options position, or just do a bullet if your firm offers them. Thus, re-instating the uptick rule is a joke. Coming down on naked shorts is probably a good idea, but is a non-issue to anyone with even a low level of market knowledge. http://www.onechicago.com/
And here's the story: http://www.tradersmagazine.com/news/101802-1.html?ET=tradersmagazine_news:e155:1053a:&st=email "SEC Commissioner Christopher Cox announced the regulator was studying whether or not it would be feasible to require the price at which a short sale occurs to be at least five cents or 10 cents over the last trade or current quote" From what I can see, this would be near impossible on stocks under $50... how many of these stocks have a 5 or 10 cent spread? You could put your offer out there, but it wouldn't get executed until the prior trade was 5 cents lower or you'd always be outside the NBBO and not get executed. Even on higher priced stocks it'd be tough.
You know the smart guys are going to try and game anything a totally corrupt SEC puts out there. But I'm here to tell you that the mood in Washington is dour at best, when it comes to Wall St. I ' m now thinking that the regulation that comes from more Wall St. footdraggin will be totally draconian. The best thing that could happen would be if the assholes that run the big firms put their own foot down, and stop the nonsense. Then, perhaps, a semblance of common sense will restore the markets. However, and someday you'll read it in a book, that kind of common sense does not reside in Manhattan. Oh, the stories I wish I could tell you. But they'll come out. If you have an in anywhere, tell them to clean their act up voluntarily. How'd that Citi ARS thing work out? What idiots. 20 bb. They need protection - from themselves.
If you are a stock daytrader, you should be pleased at this. Uptick rule is an exploitable gimmick. Since most of the current prop traders dont' even know about the glory days of bullets, chances are there will be lot of opportunity for the first 6-12 months.
A) So the stocks with volume up to 250k will bear the brunt of the shorting? Such stocks can often have a spread of $.05 to $.10 easily! B) Is this INSTEAD OF eliminating naked shorting?
W/O naming names, I know of people who have gone in front of the SEC on naked shorting and some other issues. They have no idea what you're talking about . I know that sounds unbelievable, but they are bunch of enforcement attorneys who work for the Govt. The Street is the puppeteer. So these questions your asking? someone in the know brings this stuff to them and says, "you need to do this." That's the way it works. They just don't know very much. How else do you think we're in this mess? Any regulator who knew what thehell was going on would have stopped it, wouldn't they? In Subprime, the firms didn't know. How would the regulators? So what you know have is a crisis. And you have people who know nothing given the order to fix it. How do you fix something you know nothing about? As my daddy said when I was born, "Man, this is gonna get ugly."