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DVD- thought this might interest you- eddy
NASD change in short selling effective 2/20. Any comments?
Looks like short selling of small caps will be seriously cut back in Feb. At first glance it should make ups and downs more extreme (no short selling into pops, no short covering to cushion dips. Would appreciate any comments on other things to consider
Here are the links to the NASD info:
http://www.nasdr.com/2610_2004.asp#04-03
http://www.nasdr.com/pdf-text/0403ntm.pdf
Here's a dow jones comentary:
NEW YORK (Dow Jones)--Taking most market participants by surprise, the
National Association of Securities Dealers has drastically tightened one of
its rules governing short selling.
Known as affirmative determination, the NASD rule stipulates that brokers
and dealers engaged in a short sale transaction must make sure that shares
can be delivered by settlement time, three days later.
"We closed a loophole," said Steve Luparello, executive vice president of
Market Regulation at NASD.
Until now, non-NASD members, like specialists, option markets and foreign
brokers, weren't covered under the affirmative determination rule. That
means that non-NASD members didn't have to represent to the NASD broker
through which they conducted a short sale order that they would be able to
deliver the stock by settlement date.
A short seller typically borrows stock from a broker to sell it into the
market, betting that the share price will fall so that he can buy the stock
back at a lower price and pocket the difference.
The amended NASD affirmative determination rule, which was recently approved
by the Securities and Exchange Commission, will particularly affect short
sales conducted through foreign brokers, most specifically Canadian brokers
which have often been used by investors to sell short the stock of small
U.S. companies trading on the Over-the-counter Bulletin Board or OTCBB.
Because it's often impossible to borrow the shares of companies trading on
the OTCBB, investors and hedge funds looking to take negative bets on these
often-overvalued development-stage companies have traditionally been trading
through Canada where it's not required to borrow stock before selling it
short. The practice is known as naked shorting.
That trading avenue has now been effectively closed.
The new NASD rule doesn't cover Canadian brokers, since most are not members
of the association, instead it makes it the responsibility of U.S. brokers
trading with non-members to make sure that their counterparts will be able
to settle a transaction before completing a short sale.
"It's part of (a broker's) supervisory responsibilities," NASD's Luparello
said, adding that a non-member's previous failures to deliver should be a
good indication of whether or not it will in fact be able to complete the
transaction by the settlement date.
Market makers engaged in bone fide market making activities will continue to
be exempt from affirmative determination.
Luparello said that, unlike a parallel SEC initiative to tighten short
selling rules on the small-cap markets, the new NASD rules did not originate
from worries over mounting failures to deliver stock into the national
clearing system. But Luparello said the amended NASD rule fits nicely with
the new short selling regulations now under consideration by the SEC.
"I think it addresses a gap and (shows) that we, like the SEC, are looking
at a variety of things in this area," Luparello said.
The NASD proposal was first submitted to the SEC in November 2001, well
before alleged abuses of naked shorting became the focal point of a campaign
lead by some OTCBB companies in the U.S that say they have been victimized
by the practice.
While some investors argue that short sellers provide a needed service to
the markets, others have called for the complete abolition of short selling
because of the undue pressure its puts on the shares of companies.
While market participants in the U.S. and abroad are well aware of the new
short selling regulations being put forward by the SEC, known as Regulation
SHO, most said they knew nothing of the NASD's plan before it became final.
"It's taken us by surprise," said Richard Thomas, head of compliance at
Canadian brokerage firm Pacific International.
Although separate from it, the amended NASD rule fits tightly within the
SEC's SHO which is now under review by the SEC staff after a period during
which market participants were invited to comment on it.
As it stands, the new SEC short selling rules will make it easier to short
large-cap stocks since they would do away with the "uptick" rule, which bans
short selling on a stock when the price is falling.
But it when it comes to the small-cap markets, where it's often impossible
to borrow stock, the impact of SHO will be the opposite, making it harder to
short sale stock.
The new SEC rule sets a predetermined level of so-called clearing fails -
cases in which a broker or investor cannot deliver stock within two days
after settlement - which will trigger a 90-day blackout whereby the customer
will not be allowed to short sell that security. That 90-day exemption would
affect trading of U.S. securities in and outside the U.S.
The new NASD affirmative determination rule will take effect on Feb. 20
But,but,but,but
Whatever happened to global warming??? Reminiscent of Gore giving a gloom and doomer on global warming in NYC during the coldest day on record.
What me worry.....
Fed,
What information is there to backup the rumor of the unannounced fed coupon passes?
thanks
eddy
Market showing great strength in the face of the large Fed drains
ototot
Just saw the Manchurian Candidate again . Very trippy film- ahead of its time- great performance by frank sinatra
Agree totally. Pulp fiction was Tarantinos masterpiece. Reservoir dogs was good in a limited scpoe. Jackie Brown to me was a throw away- terrible editing, just not much there.
CALM has been a great play- they benefit from flu worries because their eggs are used in making vacines, and from mad cow -eggs as a protein source
cancellation of another investment conference reported
Zeev, you can post any number you like us to believe. I personally think you're fabricating trades to maintain your so called guru status. The fact is that many of us have noticed that you often seem to get in at or near the day low. You still haven't explained that LEXR trade this morn. You have been totally wrong about this market all year calling for a tank as the market surged. You're not fooling me buddy. You're simply not as good as the picture you paint. Your followers will attack me for this but I really don't care. I'm an honest trader and have nothing to hide nor do I need to fabricate trades to maintain a following.
posted by bearmove about another zeev entry at aboslute low of day that didn't pass the smell test
Yes,
The worm has turned, so to speak. Bearmove has long defended zeev and commented on his trading prowess on many occasions. His suspicions about the truth of zeevs entires and exits have bothered me for a long time. I put zeev on ignore a long time ago. I just don't see the value of his posting his trades after the fact ad nauseum, and his endlessly revised scenraios are almost comical- because of the revisions, because they still haven't been close to what has occured, and because sheeple still give them creedence. Bearmove had criticized zeevs long term predictions, but had defended his short term trading acumen
Can you say short squeeze?????
Yes FED it's 12.5 due tomorrow
Thanx much Fed
Thanx much Joe- it's the bullandbear site I was thinking of. This market seems to be completely Fed liquidity driven, so I like to keep track of the repo pool
eddy
Fed,
I believe it was you that previously listed a site that maintains a graph of temporary fed operations and keeps track of the amounts due each day. I would appreciate it if you would post that again (my computer died yesterday).
thanks
eddy
Joe,
Just a word of thanks for your contributions to this board. I think you're spot on in terms of Fed intervention in the markets.
I've also benefited greatly from RRI and HLSH
Many thanks
eddy
Don't give Lee a hard time Opie, If the Sox get Schilling, it will be very hard for them to manage to fufill the curse once again, but I'm sure they'll manage
eddy
Nice call Opie,
Thanks to you, the dogs will be able to have their own turkey this year
eddy
Too funny,
Was wondering about the apparent contradiction between the 2 widely divergent scenarios myself
Tobin Smith wrote changwave- an interesting book. He also had an advisory service that gave awful reccomendations on stocks.
C'mon Opie, they'll be much better now that they got rid of Stuart Little as manager
SARS was the other ominous factor that Bear thought would tank world markets
I agree- and sina and sohu bounced nicely today w/ ntes lagging severely. It just seems as though its days of making the largest swings of the group might be over
The chinese govt. has clamped down (pardon the expression) on porn on the net. That was a major source of revenue for ntes.
gold, nem, gfi, hmy, rgld, rangy, pdg, kgc
among top dollar gainers so far today
Thanks much OP,
A smile much needed at this point- still digging out from the aftermath of the hurricane- the eye passed by about 40 miles away. Just got power after 4 days w/o
I remember the last time gold spiked up to over 390 and was then smacked down. This time feels different with the rumors of BIG buyers working behind the scenes and squeezing the large commercial shorts.
Tomorrow should be very interesting
Opie<
From LE Metropole:
"<Gold is surging in overseas trading. The action is frenetic
with gold up between $2 and $6. It is the second strongest
early overseas action in 7 years. The night is early, but the
only other time I recall seeing gold this strong this early
was after the Washington Agreement announcement. Gold
SOARED in the following days! ">
If we can get through this hurricane ok, I'll be very happy.
The open interest in golf futures is at historically high levels- the commercials short and the speculators long. There has been very strong physical demand. There is a rumor of an individual who has had an order out for a while to buy $4.6 billion of gold.
If gold doesn't break out here and maintain it, I think it might pull back for a while
eddy
16.25 billion in repos come due tomorrow also
Hope you're right Opie
How ya been??
still long and strong gold
TASR had good news- float only 2 million
FCX is a copper and gold stock
RINO misses KR warns
MYL 3 for 2 split
where is she located?
I hope she doesn't find herself in the path. I'm in virginia- in the projected path now
Where is Jenna?
thanks
Insurers usually do well post disaster
KLIC upgrade by merril
6.3 million short interest
47.5 million float
XOMA shelf offering
UTSI anyone have a clue as to why the smackdown??
eddy