Please tell me this is not really your logic. A short seller typically holds what percentage of shares outstanding vs. a long holder? shorts can represent what 10, 15, 20% of O/S. Hardly the buy back volume we are all looking for. When a short covers that cover represents minimal volume relative to overall volume. They are at best market making volume.
Well said! I support retail, prop and quant trading - most people don't understand the volumes and speeds involved with trading today. How easily people confuse "short selling" and "naked short selling" If anything - not enforcing the ban on "naked short selling" is the cause of the quicker decline in the markets - not "short selling." -gastropod
What has happened, in essence, is, the Street guys have totally disengaged from the actuality that quotes represent people, companies and real capital. In their quant minds, everything was game. and they were right, and wrong. Now, the problem is, the lawmakers have control. They will do some very onerous things because the public demands it. You can call them rubes, idiots, whatever. The Street loses. Simple. End of story. And they have to. Because left to themselves, they'll steal everything. They already tried. Let's see what the indictments say. They're coming, you know. Somebody has to hang for this, and it' isn't going to be the buy side guys at Calpers.
Yeah, what's this lovefest with quants, prop shops (little more thean leveraged OTB parlors) , and gamers? Liquidity providers my ass. That's the hype they tell you to justify their skimming operations. That you buy into it says more about your gullible natures that you should be revealing in public.
what bothers me is that the bid offers will always be much larger than the ask. I have already noticed it is becoming a lot harder to exit a short position compared to a long position. the MM only has to have 100 shares available and I have notice I am getting a lot more part fills on stocks even like rimm never mind stocks with a thinner volume like nflx. what I see happening is that shorts are forced to exit at several prices to exit thereby driving the price of the stock up artificially until the short interest is reduced and the stock gaps down or retraces to a more realistic price.
Remember we are only dealing with paper. Stocks are speculation, even if the government coerces you act differently. To create an uptick rule without a downtick rule is illogical, stupid, and downright evil to a logical end. In fact, I argue that a downtick rule makes much more since then an uptick. If prices are kept in line with dividend payouts, then bubbles would never be created and actual ownership of companies a reality. Speculation would be kept in check, and companies with actual earnings would be priced accordingly. Anybody who invests in a 401, IRA, ect can thank shorts for actually giving them prices that have real earnings to back them up and hold up when cycles play. Shorts be praised. They put the snake oil salesmen out of business, thus allowing ownership in actual real business models. Those who created the problems will be the first to blame anybody else, even if it was the very people who tried to save them...................
Well, for a long time, they forced prices down artificially. If we had a regulatory agency who didn't take bribes, made everyone play by rules, you wouldn't be forced up, or down. Companies wouldn't be afraid to come public. Hedgefund managers wouldn't live in 100,000,000 dollar mansions, on and on.
During the specific situation I was describing, quick downward movements in stock price, I am unsure what exact percentage of the selling pressure is from short sellers. I would reckon it was a significant proportion, and every percentage you listed would be what I would consider significant. Besides that you seem to have misunderstood entirely my point that a short seller is more likely to cover sooner than a long seller is to re-buy the same equity. In other words, selling pressure by a short seller will be followed more quickly by an equal amount of buying pressure (from the same market participant) than that which occurs after a sell exiting a long position occurs. From what I gather neither of the two people who responded to my post understood what I was getting at. I may not have clearly explained what I was saying.
Uptick rule is silly. By regulating one side of a trade, regulators are causing the market to be artificially inflated.