SEC just banned short selling??

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  • Sami
    Confirmed User
    • Mar 2004
    • 2047
    #1

    SEC just banned short selling??

    Am I hallucinating or is www.cnbc.com and wsj.com reporting that SEC just banned short selling?





    Christopher Cox is a loose cannon. This is going to dry liquidity from the markets... blow up all the hedges goldman and hedge funds have towards their positions.. drive them all out of business.


    Is this guy out of his mind??


    Also i am not talking about naked shorts here people.. his trying to ban short selling period.

    lol


    It is the end of free markets as we know it folks!

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    • Tempest
      Too lazy to set a custom title
      • May 2004
      • 10217
      #2
      Good..

      I always thought "free markets" actually meant buying and selling goods and services, not the "idea" that some arbitrary piece of paper may go up and down in some fantasy "value"...

        Comment

        • Vendot
          Confirmed User
          • May 2002
          • 3376
          #3
          I think its banned till January. You can close existing positions but not open new ones.
          "In a Time of Universal Deceit, Telling the Truth is a Revolutionary Act." - George Orwell

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            • ADL Colin
              Too lazy to set a custom title
              • Feb 2001
              • 11929
              #4
              Wild. I dunno why they just didn't put the uptick rule back in. That woulda been fair enough.

              Gonna be some crazy squeezes tomorrow


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                • Sami
                  Confirmed User
                  • Mar 2004
                  • 2047
                  #5
                  Short selling is required to keep markets intact.

                  Short selling and naked short selling are entirely different.


                  What is now to stop say AAPL from trading at 500/share ?

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                    • BVF
                      Black Vagina Finder
                      • Jan 2002
                      • 13975
                      #6
                      they banned NAKED short selling....which is short selling stock that you don't even own..

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                        • Sami
                          Confirmed User
                          • Mar 2004
                          • 2047
                          #7
                          ^^^

                          No .. now they are banning short selling period.

                          http://www.cnbc.com/id/26781646


                          This is insane!

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                            • Sami
                              Confirmed User
                              • Mar 2004
                              • 2047
                              #8
                              Originally posted by ADL Colin
                              Wild. I dunno why they just didn't put the uptick rule back in. That woulda been fair enough.

                              Gonna be some crazy squeezes tomorrow

                              I totally agree with you there. All they had to do was bring back the uptick rule, and ban naked shorts on financials!

                              There is a reason why the banks are trading at the levels they are .. because they are not worth more than what they are trading for. This is the whole purpose of capital markets !!

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                                • tiger
                                  Confirmed User
                                  • Apr 2002
                                  • 6986
                                  #9
                                  Originally posted by Sami
                                  Short selling is required to keep markets intact.

                                  Short selling and naked short selling are entirely different.


                                  What is now to stop say AAPL from trading at 500/share ?
                                  Why is short selling required?

                                  When something is too expensive people just don't buy it. They don't go and sell things they don't actually own.

                                  Short selling is like pawning your neighbors gold chains because the price of gold has gone up.

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                                    • marketsmart
                                      HOMICIDAL TROLL KILLER
                                      • Dec 2004
                                      • 20419
                                      #10
                                      good, now all these guys will move over to currency trading... or at least i hope...

                                        Comment

                                        • tiger
                                          Confirmed User
                                          • Apr 2002
                                          • 6986
                                          #11
                                          Originally posted by BVF
                                          they banned NAKED short selling....which is short selling stock that you don't even own..
                                          Sorry but wrong.

                                          Short selling is selling shares you don't own. If you owned them it would just be regular sale.

                                          Naked shorting is more complicated.

                                          "Naked short selling, or naked shorting, is the practice of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed as is done in a conventional short sale. When the seller does not then obtain the shares within the required time frame, the result is known as a "fail to deliver.""

                                          You can read more here: http://en.wikipedia.org/wiki/Naked_short_selling

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                                            • Phil21
                                              Confirmed User
                                              • May 2001
                                              • 993
                                              #12
                                              I guess I'm just stupid...

                                              I never understood why short selling even exists. It's not "investing" as far as I can tell, it's just betting on an over/under for a given stock, no? In this case, you're betting that the stock will drop and if it hits whatever short position you have you "somehow" get paid.

                                              I suppose I'll read up a bit more on it, but it seems like an absolutely silly practice that adds zero value to begin with...
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                                                • Sami
                                                  Confirmed User
                                                  • Mar 2004
                                                  • 2047
                                                  #13
                                                  My appologies, thats what I meant.
                                                  short selling is to borrow a stock you don't own.. naked short selling is not even borrowing the stock.. which is what needs to be banned.

                                                  Short selling is required for hedging purposes, liquidity.

                                                  How are you suppose to hedge against a position now?

                                                  Liquidity will drop 10 folds with no shorting.


                                                  If they actually do go through with this.. its going to start a massive equities bubble.. and when / if they do reinstate the short selling back into the markets its going to cause a mother of all crashes as equities will be brought back to fair value at a fast pace.. causing panic and further mass selling!


                                                  its been part of the markets for decades!

                                                  20% correction in the markets and the world is loosing it.

                                                  Unbelievable!


                                                  This will officially eliminate merger arbitrage... pairs... inverse etfs... banks that were hedging positions to protect correlating assets /equities will have to unwind those hedges now.

                                                  Christopher cox has lost it. Thats all I know!
                                                  Last edited by Sami; 09-18-2008, 05:02 PM.

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                                                    • Lane
                                                      Will code for food...
                                                      • Apr 2001
                                                      • 8496
                                                      #14
                                                      (i might be partially pulling the following out of my ass)

                                                      Shorting allows people to make money on a declining market, so that investors don't completely pull out, which might be even more catastrophic.

                                                      Look at real estate. Once the market started seeing a decline, all the investors fled away and sales completely plummeted. Without the sales volume, it's having a very hard time to get back on it's feet.

                                                      Short selling might be a necessary evil to keep gears turning in wall street.

                                                        Comment

                                                        • Agent 488
                                                          Registered User
                                                          • Feb 2006
                                                          • 22511
                                                          #15
                                                          http://news.google.com/news?hl=en&q=...-8&sa=N&tab=wn

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                                                            • ADL Colin
                                                              Too lazy to set a custom title
                                                              • Feb 2001
                                                              • 11929
                                                              #16
                                                              Sami, I'm completely with you.

                                                              Perfect example is the buyout of Merrill by Bank of America. The deal is for BOA to pay .86 shares of stock for every share of Merrill. BOA is currently trading for $30.58. Making Merrill worth $26.29 when the deal goes through. However Merrill is trading at just $22.06 right now. You should be able to buy Merrill and short Bank of America if you want to bet the deal will go through.


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                                                                • GetSCORECash
                                                                  Confirmed User
                                                                  • Mar 2008
                                                                  • 5527
                                                                  #17
                                                                  Lane,

                                                                  Just wanted to say:

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                                                                    • BVF
                                                                      Black Vagina Finder
                                                                      • Jan 2002
                                                                      • 13975
                                                                      #18
                                                                      Originally posted by tiger
                                                                      Sorry but wrong.

                                                                      Short selling is selling shares you don't own. If you owned them it would just be regular sale.

                                                                      Naked shorting is more complicated.

                                                                      "Naked short selling, or naked shorting, is the practice of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed as is done in a conventional short sale. When the seller does not then obtain the shares within the required time frame, the result is known as a "fail to deliver.""

                                                                      You can read more here: http://en.wikipedia.org/wiki/Naked_short_selling

                                                                      Holy fuck!!! Now that's some bullshit!!

                                                                      Black Pussy
                                                                      Click On Mr Cosby..CCbill, 60/40, 136 FHG's....The Cos Loves Black Ghetto Pussy!!

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                                                                        • marketsmart
                                                                          HOMICIDAL TROLL KILLER
                                                                          • Dec 2004
                                                                          • 20419
                                                                          #19
                                                                          Originally posted by Sami
                                                                          My appologies, thats what I meant.
                                                                          short selling is to borrow a stock you don't own.. naked short selling is not even borrowing the stock.. which is what needs to be banned.

                                                                          Short selling is required for hedging purposes, liquidity.

                                                                          How are you suppose to hedge against a position now?

                                                                          Liquidity will drop 10 folds with no shorting.


                                                                          If they actually do go through with this.. its going to start a massive equities bubble.. and when / if they do reinstate the short selling back into the markets its going to cause a mother of all crashes as equities will be brought back to fair value at a fast pace.. causing panic and further mass selling!


                                                                          its been part of the markets for decades!

                                                                          20% correction in the markets and the world is loosing it.

                                                                          Unbelievable!


                                                                          This will officially eliminate merger arbitrage... pairs... inverse etfs... banks that were hedging positions to protect correlating assets /equities will have to unwind those hedges now.

                                                                          Christopher cox has lost it. Thats all I know!
                                                                          spot on...

                                                                            Comment

                                                                            • Sami
                                                                              Confirmed User
                                                                              • Mar 2004
                                                                              • 2047
                                                                              #20
                                                                              I just got off the phone with a buddy of mine that works in the pits in Chicago.

                                                                              Everybody is freaking out!!!!!
                                                                              This is bad.. bad.. bad...

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                                                                                • marketsmart
                                                                                  HOMICIDAL TROLL KILLER
                                                                                  • Dec 2004
                                                                                  • 20419
                                                                                  #21
                                                                                  Originally posted by Sami
                                                                                  I just got off the phone with a buddy of mine that works in the pits in Chicago.

                                                                                  Everybody is freaking out!!!!!
                                                                                  This is bad.. bad.. bad...
                                                                                  its going to be wild to see what the lower liquidity will do to the market...

                                                                                    Comment

                                                                                    • slapass
                                                                                      Too lazy to set a custom title
                                                                                      • Nov 2002
                                                                                      • 14625
                                                                                      #22
                                                                                      They want to pretend that the banks were not houses of cards and insured by us the tax payer so they are throwing shit at the fan and hoping some sticks.

                                                                                        Comment

                                                                                        • pocketkangaroo
                                                                                          Confirmed User
                                                                                          • Jan 2005
                                                                                          • 8452
                                                                                          #23
                                                                                          Is this official now? That is absolutely fucking insane. Reinstate the uptick rule and stopping the naked short selling would help. Banning all short selling is just a way to falsely prop up the market so that no one can tell the true value of a stock. I wonder if this was a decision Bush Co helped push through so that they could pass the blame to the next President when the ban gets dropped and the shit hits the fan.

                                                                                            Comment

                                                                                            • Sami
                                                                                              Confirmed User
                                                                                              • Mar 2004
                                                                                              • 2047
                                                                                              #24
                                                                                              I believe so.

                                                                                              Look at what happened to the chinese markets.. down almost 70% because there is no shorting allowed over there. We ban it here and the markets will tank after the shorts get out (after the cover rally) because no shorts are there to take profits


                                                                                              Shoort squeezes is what keeps this market from crashing 5000 points in one day.

                                                                                              The Option markets couldn't function because you couldn't buy a call. Insurance companies couldn't have variable annuities because they couldn't hedge. Insurance is the foundation of banking, banking is the foundation of the economy and the economy runs the markets.

                                                                                              Why lift the uptick rule then ban it all together?? The people who got the uptick rule cancelled were convinced based on studies that it wouldn't affect the market. I don't see these same people now saying banning it will do any good.

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                                                                                                • Snake Doctor
                                                                                                  I'm Lenny2 Bitch
                                                                                                  • Mar 2001
                                                                                                  • 13449
                                                                                                  #25
                                                                                                  Originally posted by Sami
                                                                                                  20% correction in the markets and the world is loosing it.
                                                                                                  I'm not going to get into the short selling thing here....but isn't 20% the official point at which it becomes a bear market and no longer a correction?
                                                                                                  sig too big

                                                                                                    Comment

                                                                                                    • pocketkangaroo
                                                                                                      Confirmed User
                                                                                                      • Jan 2005
                                                                                                      • 8452
                                                                                                      #26
                                                                                                      No shorts to cover, none to buy during panics. Hello 3rd world economic system.

                                                                                                        Comment

                                                                                                        • acratophorum
                                                                                                          Confirmed User
                                                                                                          • May 2004
                                                                                                          • 311
                                                                                                          #27
                                                                                                          Originally posted by BVF
                                                                                                          they banned NAKED short selling....which is short selling stock that you don't even own..
                                                                                                          LOL...the very definition of short selling is selling stocks you don't own...you borrow the stock, sell it, then buy it back (hopefully) at a cheaper price. Naked short selling is technically illegal, and consists of shorting shares that may not even EXIST.
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                                                                                                            • Tanker
                                                                                                              Confirmed User
                                                                                                              • Nov 2000
                                                                                                              • 9287
                                                                                                              #28
                                                                                                              first I had to stop naked trading now this ?

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                                                                                                                • acratophorum
                                                                                                                  Confirmed User
                                                                                                                  • May 2004
                                                                                                                  • 311
                                                                                                                  #29
                                                                                                                  Originally posted by tiger
                                                                                                                  Why is short selling required?

                                                                                                                  When something is too expensive people just don't buy it. They don't go and sell things they don't actually own.

                                                                                                                  Short selling is like pawning your neighbors gold chains because the price of gold has gone up.
                                                                                                                  Shorting adds liquidity to the market...it basically brings more sellers to the table...
                                                                                                                  Sweet sweet program...
                                                                                                                  EARN up to 100% REV SHARE! Don't believe me? See sig!!!

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                                                                                                                    • acratophorum
                                                                                                                      Confirmed User
                                                                                                                      • May 2004
                                                                                                                      • 311
                                                                                                                      #30
                                                                                                                      Originally posted by Sami
                                                                                                                      My appologies, thats what I meant.
                                                                                                                      short selling is to borrow a stock you don't own.. naked short selling is not even borrowing the stock.. which is what needs to be banned.

                                                                                                                      Short selling is required for hedging purposes, liquidity.

                                                                                                                      How are you suppose to hedge against a position now?

                                                                                                                      Liquidity will drop 10 folds with no shorting.


                                                                                                                      If they actually do go through with this.. its going to start a massive equities bubble.. and when / if they do reinstate the short selling back into the markets its going to cause a mother of all crashes as equities will be brought back to fair value at a fast pace.. causing panic and further mass selling!


                                                                                                                      its been part of the markets for decades!

                                                                                                                      20% correction in the markets and the world is loosing it.

                                                                                                                      Unbelievable!


                                                                                                                      This will officially eliminate merger arbitrage... pairs... inverse etfs... banks that were hedging positions to protect correlating assets /equities will have to unwind those hedges now.

                                                                                                                      Christopher cox has lost it. Thats all I know!
                                                                                                                      You can still hedge your position buy buying put options or short (or ultra-short) ETFs, depending on what exactly you are looking to do....
                                                                                                                      Sweet sweet program...
                                                                                                                      EARN up to 100% REV SHARE! Don't believe me? See sig!!!

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                                                                                                                        • pocketkangaroo
                                                                                                                          Confirmed User
                                                                                                                          • Jan 2005
                                                                                                                          • 8452
                                                                                                                          #31
                                                                                                                          Maybe the government can just come in and tell us how much we can and can't pay for a stock. They can set all the prices themselves. Why bother with this free market crap anymore?

                                                                                                                            Comment

                                                                                                                            • crockett
                                                                                                                              in a van by the river
                                                                                                                              • May 2003
                                                                                                                              • 76818
                                                                                                                              #32
                                                                                                                              Short selling helps keep a market stable.. it would be very stupid to out right ban it, but it does need more regulations to stop abuse.
                                                                                                                              In November, you can vote for America's next president or its first dictator.

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                                                                                                                                • SomeCreep
                                                                                                                                  :glugglug
                                                                                                                                  • Mar 2003
                                                                                                                                  • 26118
                                                                                                                                  #33
                                                                                                                                  Originally posted by Lane
                                                                                                                                  (i might be partially pulling the following out of my ass)

                                                                                                                                  Shorting allows people to make money on a declining market, so that investors don't completely pull out, which might be even more catastrophic.

                                                                                                                                  Look at real estate. Once the market started seeing a decline, all the investors fled away and sales completely plummeted. Without the sales volume, it's having a very hard time to get back on it's feet.

                                                                                                                                  Short selling might be a necessary evil to keep gears turning in wall street.
                                                                                                                                  Hey, you're still around? I haven't seen you post in a while. I remember you used to be a regular poster on this board 4 or 5 years ago.

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