iiphos, The market has become more efficient due to decimalization, therefore a freefall of support is less likely because of it. With the fraction system and the fact that spreads were often $1/2 to a $1 wide, the short sales rule had value for the reasons I noted in my prior posts. The rules slowed the downturns velocity during wide market fraction spreads where price could clip down by $.50 to a $1 at a time. Decimalization has reduced the effectiveness of the rule and hence why it is now outdated. To have abolished the rule during a fractional wide spread market would have been a mistake...today it now makes sense with narrow spread decimalization. The posts earlier were to support the theory of the rule and why they made sense during the fractional wide spread days versus today. So the evolution of change whereby decimalization brought more market efficiency had to occur first and hence not a coincidence to what I believe will be the inevitable abolishment of the rule.
David you have drawn me in. While your reasoning sounds solid I am sure you will admit it is just a guess. I would think it would be impossible to do a regression analysis on the effect of the uptick rule because we could not hold all the other factors consistent or constant. Also what seems like a "heated" drop to one might be reasonable to the other. However, since I do not see any cause for concern about shorting in the futures markets I wonder why there would be concern on the NYSE. I realize there are differences between futures and stocks but most capitalist and economists would argue that the least amount of intervention into a mature market the better. There have been many good arguments on the subjects of trading curbs, halts and other interventions and while we do not have to get into this argument ourselves I would think that you would agree that there are strong arguments -guesses- for both sides. However, as a trader of mostly listed stocks I would have to say I will be sad to see the uptick rule go because it gives me a tremendous edge. I use bullets and they are responsible for quite a large percentage of my profit. I suggest try making a few dozen trades or more a day in one listed stock without them; you will scream for bullets. I consider them such and advantage that I would have not spoken about them on this board had my old college roommate, who is a lawyer at the SEC, not told me months ago that the uptick rule is on it way out. His previous predictions have been accurate so I believe him. I suppose my edge will eventually disappear, but until then I will not complain about the uptick rule. By the way I agree with the statements on this board about trading in San Diego, (although there are a least a few companies to choose from) I would like to hear suggestions about nominations for the other best places to trade. I know I have always felt lured by Incline village since that is where Ed Seykota choose to live. Perhaps vail or mammoth or any great ski area. How is the connectivity? I was also impressed with SF as a trading location. I traded in SF last week and one of the guys in the office told me he was looking forward to the winds of spring for boardsailing afterwork. Great city, a few hours from Tahoe and good boardsailing, not bad.