Seeings how the market place is suppose to be (emphasis on suppose!!!) transparent, equitable, and the very basis of a supply and demand economy the very fact that the up/down tick rule was ever brought into effect makes me laugh. Who was the idiot that came up with the idea that people that own the stock should have some kind of defense to help protect their investment in the case of a market crash. This whole system is based on risk. The whole system is based on supply and demand. If the market crashes short sellers should be able to smash a stock into the ground if they are able to. Of course if the company is a decent well run profitable company short sellers will never be able to cripple a stock because at some point the buyers will step in because the price they can now buy it at is a steal. So the question really isnt WHY NOW???? the real question is why the hell didnt they do this 20 years ago!
http://www.elitetrader.com/vb/showthread.php?s=&threadid=96745&perpage=5&pagenumber=3 these two threads should be combined don't count your chickens before they hatch. as far as the rule change taking effect. sec is working to get rid of naked short selling. after the next market decline short selling will be banned completely.
The SEC is not really trying to end naked short selling. They are trying to placate the movement with a bunch of gobbledegook. If you wanted to stop naked short selling, you would enforce existing laws. When GS mismarks longs, you don't fine them 2mm and then brag about it. You disgorge the profits, treble it, and then you don't have to ask Congress for money. The uptick rule is not my specialty. My only concern is, there are Lex Luthers who will figure out how to misuse it; that's human nature, I expect it. But we have captive reg agencies that will let it happen to the detriment of the markets. That's my concern. I play by the rules. It's difficult when they don't. The SEC is in for a very rude awakening very quickly. You cannot treat market participants like they do, and expect to have capital formation. We need Criminal actions, I beliieve they are imminent, and we need it now. My God, if they put Scooter in jail, they ought to be able to prosecute these thugs. I will point out to you Paul Berger was in all essence accused of perjury on Dec 5 by Arlen Specter, Chair of the Judiciary Committee at that time. I spoke w/ Specter's office Wednesday, and they are aware of the situation at the SEC. From our perspective, when an investigation commences, there can be no comment from the investigators. Therefore, as long as the Judiciary is silent, as long as the GAO is silent, it is happening. The festivities Wednesday were all sho (sic) and blow, and impressed no one. I do agree with the previous poster. By not doing their job, these bastard sons of Joe Kennedy invite a backlash that will effect all of us, from Don Bright all the way to a noob. Me, I just don't cotton to taking it up the ass, and I've had enough. Ten years this crap has been going on, from the top firms with a basically , "go fuck yourself" attitude. It's about up. I don't know the damage to the industry as is, but it's not my doing. Let Blankfeld and Mack take the fall.
why of course - if you are flat at the end of the day and you can short down ticks what is the point for checking the hard to borrow list. Especially if you are not with an NASD firm. Just to give you a little background - in the old days as a member of either chicago or the exchange in San Francisco - guys in my office shorted the hell out of IPOs and made a lot of money until a loudmouth in our group got himself quoted in the media. We were not governed by the NASD rules. The nasd reached an agreement with the exchange to prevent us from doing it for three months. Nothing was mentioned about the borrow list at the time. In fact we never worried about the borrow list to we went with an NASD firm. perhaps rules have changed but rules are meant to be interpreted as well.
If someone wants to ignore the hard to borrow list what does shorting on a downtick have to do with that? You can still short a stock on the hard to borrow that requires an uptick. Of course if your caught you may get a fine or lose the profits. I don't see how the hard to borrow list has anything to do with an uptick needed to short. Software I have used in the past will prompt me with a warning if the stock is hard to borrow but I can still hit "yes" short and ignore the warning and get short the stock. Whether or not it requires an uptick makes no difference. (If I wanted to risk losing the profits and a fine).
The requirement to "locate stock before you short" should not be applied to daytraders, who close out their positions by the end of the day. As the SEC itself mentions, this rule is meant to protect against naked short-selling (ie shorting shares you have not borrowed and holding for more than the 3 day settlement period) For daytraders, the connection between the uptick rule and the requirement to "locate stock before shorting" is that they are both annoying, artificial rules that push the daytraders' costs up for no apparent reason, and reduce liquidity in the market by preventing daytraders from participating on the short side. Next to be abolished: the unfair rule of making daytraders locate stock before shorting.
Bitter?????? By the absence of a required uptick? Perhaps you might want to stick with banging out dimes rather than pop psychology, Sigmund. I'm failing to see the benefit of the rule remaining intact. Gee, IF I saw a genuine personal benefit, why then I guess I could be eh...........bitter. I've never found a uptick any more of an obstacle than transaction expense. I do find taxes to be quite annoying. Conspiracy theorist? Broad brush cliche generally offered in a knee jerk response by those that can't/won't think. You know anyone like that? This is a rigged game. Opening gaps the most basic. That said, I posed a question, namely "why now" three times and didn't receive even an attempt at an answer. Does "it" need to be posed 5 times? A dozen times? Perpetually? Pssst, this wasn't a gift to the scalpers of the world. The rule could have been abandoned at any point in the last 70 years. Institutions, the bulk of activity (volume and magnitude), by charter, can't short. A princely portion of hedge funds don't hedge. Combined, a "long" bias. NYSE specialists have been exempt from upticks. No everyone is flat at day's end. In fact, that's by a wide margin (again in the proper context)......the majoity. The inverted demographic pyramind as time progresses, is becoming more pronounced. All that passive 401-K money just sitting there. Slow moving prey. Let's try this again. Would anyone (other than B1010 since he's already provided valuable information) want to speculate (in the proper context) as to WHY.............after SEVEN DECADES...........the powers to be..................have decided to abandon a rule, that apparently for some, has been a major obstacle ??????
your software has nothing to do with it. it is the brokers software. it is the broker who pays the penalty unless you are claiming that you can deliver the shares. please explain.
From the SEC Website: COMMISSION ANNOUNCEMENTS SEC TO END SHORT SALE TICK TEST ON JULY 6, 2007 On June 13, 2007, the Commission voted to remove the tick test of Rule 10a-1 and to amend Regulation SHO to provide that no short sale price test, including any price test of any exchange or national securities association, shall apply to short sales in any security. The Commission has established a compliance date of July 6, 2007 for the changes. Publication of the amendments is expected to be made in the Federal Register during the week of July 2, 2007. (Rel. 34-55970)