non shortable stocks

Discussion in 'Trading' started by forsalenyc, Jul 17, 2008.

  1. since when could I not short C JPM BAC MER MS LEH? is it true that you can't short 30 financial stocks? does anyone have a list? thx
     
  2. Just buy puts! These puppies have highly liquid options.
     
  3. I can short just fine. What broker are you using?

    I actually forgot all about that rule now that you mention it.
     
  4. We do have to do a Locate with Goldman, but haven't had any trouble today, even with FNM and FRE.

    You might check the valuation on those puts...my quick check showed at the money puts to be about 30% over value. Single stock futures? I'm not sure how they're trading, but a possibility.

    Don
     
  5. thx don and others,

    I gotta call and get Locate. been lazy not signing up earlier.
     
  6. Arnie

    Arnie

    No problem shorting them with IB.
     
  7. lindq

    lindq


    Don, did you see any increase in downside volatility after the uptick rule was removed last year? Were intraday short trades becoming more profitable without the cushion of an uptick rule?

    And what's your sense of how this new ruling might impact short strategies if it is broadened to more stocks?

    I trade the Russell 2000 almost exclusively short, and am a little concerned about how any regs that involve short sales may impact the movement of indexes.
     
  8. same here.....now i can...but early this morning none where available to me....
     
  9. Actually kind of interesting. Summer of 2007 showed a big move in the VIX (Volatility Index) that was actually a thorn in the side of many brokerages and clearing firms. The September contract was being shorted at (near) all time highs, while traders were "hedging" with January contracts. Well, the January contracts didn't move like expected, causing a major ripple within the industry. Many firms stopped their traders from engaging in calendar spreads on the VIX.

    And, interestingly enough, the first couple of months without the uptick rule saw a big rise in the overall market. Our traders (correlated pairs groups) were thrilled by not having to wait for upticks, but since we are hedged, I don't feel we had any effect on the overall market movement.

    My opinion about the regulators and bureacrats blaming short selling for recent market sell off and overall state of the economy, is simply looking for scapegoats. When all major economic indicators point in one direction, and we have so many banking problems, I hardly think the traders are responsible.

    Long answer to a short question. The short answer is "not really" to the downside question. index arbitrage should not hurt your strategy, and I wouldn't think that any big players would push indices straight down. If they tried anything like that, the arbitrageurs would have a field day, in my opinion.

    Don
     
  10. I received an email from Goldman regarding FNM and FRE and other financial firms... not being able to short them from July 21-29... I'll try to listen to the conference call later today to see what the whole deal is.

    Don
     
    #10     Jul 17, 2008