I'm a newbie trader, and I trade expensive stocks [with mostly success], anywhere from $70-$100, on the NYSE. A lot of times I see guys with big orders on the bid or the offer. Then, no one actually hits the offer. So, I see the big order get split up in half and adjusted so the offer drops even further. Then I see a sort of leap-frogging of sorts up until a point where both groups of orders are eaten up by buyers. If no one is eating their shares, it seems equally likely to me that getting short / selling shares around even a penny or so under levels where they are showing their offer is equally as difficult given the uptick rule. The uptick rule in this scenario is a huge nuisance, because I can't seem to get a fill at any reasonable price. Does it actually make sense to widen my acceptable loss risk and try to find a buyer before they go crazy and start leap-frogging all the way down? Does anyone out there actively exploit this scenario when they see it and actually make a buck off of it? I see this happen over and over, and can never get short before the stock plummets. If I -do- get short, it's usually around the point when the buyers take over -anyway-. So, the whole thing is kind of screwy. ... Also, is it inappropriate to talk about things like this in public forums? I mean, is this considered asking for another trader's edge? I guess I'm just asking how to short with the lowest risk possible. ... While I'm posting -- where do I get a list of stocks without the uptick rule?
I should mention that when I see this happen on the buy-side, I'm almost always making money on the setup. It's just the short side that is driving me crazy.
NYSE short exempt list is here... http://www.nyse.com/Frameset.html?displayPage=/regshopilot/nysepla20050428.html
Find a few stocks you trade well and get some conversions on them. If they move well, they will pay for themselves in a very short amount of time. I got a conversion on this one stock the other day and it cost me about $400 for the month and the first day I used it I made about $2500 in that stock. So it was worth it!!
A conversion is a synthetic long position, I believe done by marrying puts, which allows you to sell on downticks (thus avoiding the uptick rule). I have a couple 1000 share conversions in a couple stocks and this has made trading the short side 100X easier. It costs a certain amount ( I believe mine costs about $400 each for the month, plus you may have to pay the specialist a premium for getting you the conversion). If you trade a stock often and have success, then its definitely worth it.