As to your last sentence, I don't think there's anything obvious about it. More chop? Excluding February, S&P hasn't had a 2% move (up or down) since when? Perhaps "it" will alleviate that. Theres' also the none available/naked shorts aspects. Scalp requires size. Size requires shares. More scalpers now in the arena should cause more chop.
I do a lot of shorting, including some very illiquid stocks, and this is a huge win for my business. My trading costs were much higher entering a short position versus a long position. Thanks SEC! Martin
I know its going to help some of my trading by giving me more stocks to trade as far my scalping trades. (However, I don't scalp as much as I used to). Who says you can't get size on a short??? Thats why I hit the NYSE and 3 or 4 other ECNS at the same time. Try getting size waiting for an uptick. I could careless about your trading style. On my quick scalp short trades I basically have been trading the Reg SHO stocks exclusively anyway because my fills often so much better because I don't need an uptick. And its much easier to get "CHOPPED" out of a trade when your fill is 15 or 20 cents away from the price you saw the trade develop because your waiting for the uptick. Unless your at one of those firms which have "special products" which still let their traders cut in front of short sellers stepping down then I don't see how it can be a bad thing for someone who scalps part of the time.
I know you couldn't care LESS about my trading style. Doesn' t matter how I trade. There's far broader implications here. Let's see. 1. The SEC is a joke. Since inception with Joe Kennedy watching the hen house. Slap a few fingers once in a while. Good for morale. Keeps the public pacified but unimpacted in truly a predator/prey arena. 2. We have the breakdown of a "rule" intact for 69 years............................ Why now? Why not 20 years ago? Short the box used to be one way to circumvent the rule. Drop the long leg. Walla, instant short. Naturally it took twice as much capital temporarily. Options and IRS eliminated that edge. And now "they're" eliminating the issue? 3. In 1949, after 15 years of lobbying, NYSE specialists succeeded in have Fed Regs T and U ammended. Allowed for establishment of omnibus accounts, 20 to 1 leverage, and a host of other arrows for their quiver. Ushered in the 1949 to 66 secular bull. Pssst, Naz didn't exist until 1971. 4. Got news for you bucko, the big money is not in your scalping for miniscule chunks of multi-year moves. Psssst, we've (that's you and I) got a massive inverted demograpic pyramid that's going to cause a host of problems in the years to come. Just the traffic on streets will be annoying. Changing consumption patterns. Non-durables and leisure. The same pyramid that prompted muscle cars in the late 60's/70's and the recent housing bubble. Empty nesters downsize and spoil their grandchildren. My real point............................all that 401-K money to be confiscated before or soon after they retire. Bascially blind pools funded (and matched once a quarter). Remotely related to both the re-fi boom of recent years and the lack of savings. Whadd'ya know, the savings rate is at lowest since the uptick was implemented 7 decades ago. Peverse coincidence. Again..........WHY eliminate the uptick................................. now? A GIFT to the scalpers of the world? 5. As for this new era, Short at market OR.........short at limit? Former suggests bad fills and slippage. The latter, merely a psuedo uptick rule, the converse of what you're celebrating. 6. Typical ET thread. LONG on bravado and SHORT on enlightenment. Once again, why now? After 7 decades. There's an agenda here somewhere. I'm seeking some input.
Dam someones seems a little bitter by losing the uptick. I think your losing me man. I just said I'm glad its finally changing now. I don't give a F$CK about all your conspiracy theories. Your not adding information that everybody doesn't already know. Whats your point man??? Theres an agenda??? NO SH$T?? U THINK????? Everyone knows theres an agenda for this rule change now. There was definately an agenda for keeping it place as long as they did. So what?? The question is what is that agenda and who's is it??? For me its WHO CARES! its nothing I will ever have any control over. I'm just glad its changing now. PEACE
One reason the rule is changing is because many of the big players have figured out ways around it. Another reason of course, is that it's no longer of much use to those who in the past used it for their benefit. As to *who* this rule abolition will benefit, I'm not sure. Maybe with time, we'll see some pattern emerge.
I for one think that the removal of the uptick will create more volume in the market. It will be interesting to see what it does to volatility, and liquidity. It will certainly make it tougher for guys to post big size on the bid and push shit up by hiding behind the uptick. If you put yourself out there in the absence of the uptick you better be prepared for someone to swipe you and leave you holding a shit load of shares. As a result it may increase volatility in some issues as guys will be reticent to step in front of a stock that looks like its due for a smackdown. My guess it that you may see a lot more technical trading like you do in the futures markets where the is no tick test. It will be one more step towards more 'efficient' equity markets (which incidentally I have some mixed emotions about since inefficiency is a huge reason why scalping is an effective money maker in the equities markets). Look at the ES and the NQ, they are a bitch to scalp despite the huge liquidity. Those contracts are way too efficient. At any rate, as i have posted elsewhere, I am happy to see the tick test gone. I welcome the freedom to go long or short at will. It will also be interesting to see if this has any influence on the volume of some ETFs. I have traded a lot of ETFs in recent years just because of the ability to short without a problem. This will eliminate the need to do that and may shift some of my volume. Auto