A downtick rule is not going to happen. But it would only be fair if they reinstate the uptick rule to fill all buy to cover orders before filling any buy to open orders at a given price.
Make sense for a buy to cover has higher priority than a buy to acquire. It could smooth down the short squeeze a bit.
Probably right. They don't want the market to be "gunned" to the downside, but if done to the upside, Viola!
There's plenty political pressure. The SEC understands that the rule is bullshit. It doesn't really want to re-instate it. However, it's under an incredible amount of pressure from the cesspit of morons on capital hill and from bankers. I think the SEC is trying to find an alternative that will do as little damage as possible and satisfy the halfwits in congress.
The chinese market allowed shorting for the first time in history right in the middle of the meltdown. There was no way for the SEC to know that we were headed into a major meltdown. If they did, they would have all quit and became traders, retiring to untold riches right about now. Even if they did miraculously know, the uptick rule wouldn't have stopped the meltdown - as it didn't in 1987 and 2000.
From bankers? Thats tell, here could be the reason behind... Dear Customers, The risk of collapsing wasn't due to our false that we had been gambling on mortgage backed securities, but it was due to the SEC faulty rule. Now the good rule is back and you are reassured. Thank you for your understanding. -- Your Trusted Bank
Patchie, you demand rigorous empirical data to remove the uptick rule. Where's the rigorous empirical data to support the need for one? If there's no data for one, then how do you justify putting in place such a market manipulation? The rule won't stop prices going down and going down fast because there's tons of academic research showing that lack of demand, not short selling, drives down price. However, it is yet another hurdle for traders and other exchanges in developed countries don't have short sale price tests. Combined with Sarb-Ox, it'll do its part to drive even more listing and trading off American exchanges and suck liquidity out of the U.S. markets. That's the real damage of the uptick rule.
Angrycat - stay angry. You clearly miss the point. There is a 70 year history in having one and one year without it. the year without it was - Chaotic from all sides of the fence.
Patchie, There are hundreds of years of stock market history before the uptick was a gleam in anyone's eye. There was no rigorous empirical research to justify putting it in place, There was no rigorous empirical research on its effect when it was in place. Why are you insisting on rigorous empirical research for its removal? On what JUSTIFIABLE grounds do you insist rigorous empirical research only the for the removal but not for the implementation? "We had it for 70 years" is very poor reasoning and even poorer grounds.