My main areas of uncertainity on shorting is how to do it without violating any rules such as the "up-tick" rules. I know on NYSE stocks I can only sell if the current price is an uptick from the previous price or is the same price as the previous price and the price before that one was an uptick. On NASDAQ stocks I am confused because I think it is based on the bid price but I don't really understand how this works. I also read somewhere that you don't really have to be worried about violating the uptick rules because the up and down arrow adjacent to the last price will tell you whether or not you can short. However, if the arrow is up (or down), I am not sure of what price I am required to enter my short. I would be apppreciative if someone could help clear this up for me. I currently use Cybertrader. Thanks
You're doing the right thing asking this question ahead of time. You definately don't want the call from the SEC.
I dont know about cybertrader....but when you are shorting you are selling. So you typically find the stock you want to trade and "sell" shares of it and "buy" it back when it drops.....did i answer ur question?
I'm not sure about the NYSE stocks...since I try to avoid trading them. But you can definitely short the majority of Nasdaq stocks if not all of them on a downtick via the ECNs. Just use Instinet/ARCA and it's a go. I do this everyday via Cybertrader.
Just use the smart orders at times and the cyberexchange orders at other times. You'll notice the difference in fills on shorts. Of course you could always put limit offers at levels through INET, cheapest cost of trade.
i believe that inet no longer allows you to short on a downtick because of the rule change in jan. arca will allow it for naz only.
I don't know about any rule change in Jan. I trade via INET everyday and I can definitely short on downticks.
Here's the rule change from Island's website: http://www.island.com/subscribers/emailarchive/2006/20060118_2.asp What stocks are you able to short on downticks?
QQQQ, JNPR, GOOG, YHOO, AMZN, EBAY, BRCM, SNDK...etc. I could go on and on. I haven't been prohibited from shorting any Nasdaq stocks on the downticks so far. You can try it if you need anymore proof. Just use INET or ARCA.