Thursday, March 26, 2009

Shorting Stocks and the Uptick Rule

Can someone explain how the uptick rule is supposed to keep short sellers from doing their thing?
If someone wants to short 3 million shares, does it matter to them if they have to wait for an uptick or not? Or is it one uptick per share? If it is one uptick per share that makes sense. If it is one uptick per trade it makes no sense. I can't see the short seller really caring if the ticks turn green while they are short selling. They don't care if for a moment there is more buyers than sellers. They just want to create a run on a stock by creating a huge sell off, sucking in the retail investors to sell. Than after the carnage they buy back their shares.
I have yet to see how the uptick rule will stop this from happening.

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