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View Full Version : Naked Shorting, and the Uptick Rule



James48843
07-27-2009, 09:08 PM
The SEC is in the news again today.

They refused to reinstate the uptick rule, at least for now, while they study it some more. They did, however, extend the prohibition on naked shorting, that was to have expired Friday this week.

An extract of the article:

" The five SEC commissioners voted in April to put forward for public comment five alternative short-selling plans. One option is restoring a Depression-era rule that prohibits short sellers from making their trades until a stock ticks at least one penny above its previous trading price. The goal of the so-called uptick rule is to prevent selling sprees that feed upon themselves -- actions that battered the stocks of banks and other companies over the last year.Another approach would ban short-selling for the rest of the trading session in a stock that declines by 10 percent or more.


Schapiro said last week the SEC could decide on a final course of action in "the next several weeks or several months."

Read the complete article here:
http://finance.yahoo.com/news/SEC-rule-on-naked-apf-3523034809.html?x=0&sec=topStories&pos=2&asset=&ccode=

In my opinion- the market needs the uptick rule reinstated in order to get back to growth. It was dropped by the previous administration, after working successfully since the depression. The removal of the uptick rule happened just a few months before the current nightmare downturn started, and I am convinced the removal of the uptick rule was one of the things that caused the size of the decline over the last two years.