Because of the uptick rule and the requirement that orders be 1/16 above the bid otherwise, I've found that shorting stock is REALLY difficult to do. My trades now all consist of buying an uptrending stock after a pullback ... I now stick to this conservative play because it nearly always works and I have lost enough money in this first month of daytrading to be near my cutoff point. I would like to know if there is also a high-percentage and legal way of getting into short positions. I've read that some people send in a small buy order that causes an uptick, then short the stock, but I don't believe that I could ever key in successive orders so fast manually.
Short the QQQ , spyders,Merril Lynch Holders or S&P and Mini S& P futures contracts. All of the above don't require an uptick. Robert Tharp
Or if you use a broker that offers options, you can simply buy puts on the stock you'd like to short (assuming the stock you're watching has options available). There's no uptick rule to worry about there. Also, if you're using Realtick, there is actually a loophole in the software that allows you to short NASDAQ stocks on downticks. However, be aware that technically that's not allowed by the NASD, and if a trade you did this way was reviewed by them they would break it.
Unfortunately, options are not good for daytrading, coz of large spread and bigger commissions, not to mention slow fills. Even QQQ may not get you fast fills, coz it's traded on AMEX, filled by market makers, not on Nasdaq ECNs (even though they recently merged).
on realtick, you can put in a short order under the market, and it will keep ticking down and be the inside offer until filled. Otherwise, just wait for upticks...You want to be putting your short on at the top of a bounce anyway. As for NYSE names, I generally just short at market... The specialist loves to pocket the eigth on 2k shares...And I don't mind, b/c I want to be in the trade b/c i think it is gonna drop much more than 1/8. It is much harder on the nyse admitedly, but I mainly trade nyse, and doing it at market is the best method... In all honesty, on the nyse, it is easier to just use market orders all the time unless the spread opens, or the stock which you are short is tanking and you want to frontrun a whole number by 1/16
If you trade at a professional firm, you can get "bullets" and/or conversions that will let you bypass the uptick rule.