Watch today's action become an impetus for bringing back some semblance of the uptick rule - separate from any regulation or new rules that will relating to HFT/Algo's.
I always found it suspicious that they eliminated the uptick rule shortly after the summer of '07, when the market topped. They claim it doesn't make sense now due to program trading, hmm.
we can always rehash argument about the value of the uptick rule. is that the pt.? what always remains is that the public is for it, professional traders are against it. members of the exchange are for it as long they are exempted, hedge funds don't care as long as they can get around it.
The uptick rule only applied to equities and not futures or any other derivative market. Even with the old uptick rule in place the same pressure down could occur because HFT traders would program their computers to buy 100 shares one tick higher and sell 100,100 shares all inside of 5ms. Considering the trading venues today can not even sync their circuit breakers... Policing and enforcing any type of uptick rule with microsecond trading and multiple trading venues would be a challenge and more likely a fiasco.
And I always find it suspicious when people claim the elimination of the uptick rule exacerbated the financial crisis. You know why? Because when shorting was declared ILLEGAL on financial securities, the market got freaking hammered. Wait, I thought that if there was no shorting that couldn't happen!? Confused .
I often wonder what happens when you get futures like the YM and ES that can be naked shorted but the underlying DIA's and the SPY's are subject to an uptick rule. It could happen that all of the action in a scenario like that gos to the futures instead of equities for massive naked shorting power. Therefore the rule doesnt work and is a bad idea.
correct. when the NYSE halted trading on thursday orders went to one or more of the 49 US exchanges still opened. if rule changes make it difficult to trade in the US big smart money will migrate overseas to avoid onerous US restrictions.of course this is beyond the comprehension of wild eyed populist politicians.