New Short Rules

Discussion in 'Trading' started by cstfx, Jul 18, 2008.

  1. cstfx


    How will the new short sale rules that go into effect on Monday affect the daytrader? Will these new rules pretty much make shorting stocks for scalping, etc, no longer viable? Is this another nail in the coffin of daytrading equities? Or maybe I am interpreting the rules wrong.
  2. I got a call from Goldman this morning before the opening. As it stands now, GS has programmed our eLocates to act as "Pre-borrows" for the 19 securities listed. If you don't "PreBorrow" you are subject to fines (again, as it stands now).


  3. I think it will be transparent to us at the retail level. Brokers now have to have previously borrowed the shares prior to sale, while previously they didn't have to borrow them until settlement.

    Since firms were intentionally failing to deliver, it amounted to selling counterfeit shares. What is complete BS about the SEC ruling is that they are selectively enforcing the rule only for companies they care about and ignoring the blatant naked short selling and failure to deliver of small caps such as the junior mining shares.

    See here for an excellent presentation on the issue:
  4. it's counterfeiting., making unauthorized secondary offerings, usurping voting privleges, it steals from pension funds who are big lender of securities as Goldman isn't getting real locates, and they are keeping the vig.

    Wanna keep going?

    How about a multiple of demand overwhelms any possible supply? Lost jobs? Vendors go unpaid?

    Yeah. Nss is a real hoot.
  5. eagle


    Temporary rule. Kind of pilot measure.

  6. cstfx


    So the pre-borrow is only going to be for these stocks, not all the others? Because I was hearing that some firms would now be requiring pre-borrow for other stocks as well. 19 stocks I believe most traders can live w/o trading short, but if this is extended out, it will kill the day traders.
  7. i think we have been down this road before hopefully the regs are focusing on the hedgies and their rumor mill
  8. Time to look at Single Stock Futures for Shorting
  9. wont be the end for daytraders. if it remains watch how many short and ultrashort ETFs pop up in the next 6 months. You cant stop ambitious people from finding a way around the rules to make money
  10. Why do you guys worry about this when there is no prior borrowing requirements needed to sell SSFs.OneChicago, the Single Stock Futures Exchange, has available the following stock listings in SSFs, AZ, BAC, BCS, C, CS, DB, FRE, GS, HBC, LEH, FNM, JPM, MER, MFG, MS, RBS, UBS, each contract equivalent to 100 shares, 4 contract months, expiry the third Friday of each expiry and physical delivery T+ 3days. Most expiries coincide with listed equity options.
    You have access to the Exchange through IB. So why worry about GS and letting them control what you can or can't do?
    #10     Jul 25, 2008