Since we have been discussing the trading during the day, this post seemed appropriate.It was posted by pontiyak
A pro speaks out.....
04 Apr 2005, 09:23 PM EDT
Msg. 67767 of 67767
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Posted Apr 4, 2005, 12:15 AM ET by B. Patterson
I really cannot believe all this time being spent on disproving naked shorting. It is blatantly obvious and has now ripped over $2 trillion dollars from the American people.
As a Professional Trader, I see it every day. In fact, this past week alone, a new candidate hit the list. Eltek(ELTK) posted great quarterly numbers about 10 days ago. A smaller float company, it took off to the upside and set a new 52 week high. It came down on profit taking to $3.88, then this past Monday, it broke out from $4.12 to another new high at $6.40. Since that $6.40 on Monday, CIBC World Markets showed up with "the refreshing ask from hell". CIBC had no previous position in ELTK. The stock has 5.49 mil O/S and a flaot of 2.8 mil shares. No insiders have sold any shares nor have they filed to sell any shares. On Monday, the stock traded over 12 million shares...almost 5 times the float.
From that point on Monday, the stock traded over 14 million shares and CIBC shorted and/or sold 6.683 million shares.
How is this possible? It's very possible. And it is very real. It is naked shorting.
After their earning's release on 3/21, ELTK showed up on 3 German exchanges as a listed company WITHOUT THE COMPANY'S CONSENT.
This Friday, they appeared on the Reg SHO FTD list.
I have personally witnessed it myself. I see it all day long. It is not hard to find it.
Take a stock that is trading maybe 500K-1mil shares a day. Take the slow time from 11:30am-1:00pm EST. The MM's are kiting shares on an immediate basis. I will enter an order to buy an obscure amount of shares...like 1423 or 2137 shares. I buy them on the ask. Somebody just sold that many shares that I bought. That sell, and of course my buy, will settle in 3 days. But, the sell is what we are concerned with from the person I bought from.
As I said, the MMs will kite those shares that were sold to me and sell them again. Just watch the tape. Sure enough, a few minutes later at the ask or a penny or two above the ask, here comes the identical same number of shares crossing the tape. If you don't see it in the tape because that ask was bought in partials, you will see it as the best ask lot if and when the price gets there.
The MM's will do it all day long. Tomorrow they will do it again. Four days from now, they will kite shares to replace all the nakeds from today that are settling. Then, they will pass the entire lot off to a hedge for a fee to skirt any FTD's.
Not just in theory, but in provable practice, it takes twice as many shares to make a stock go higher as it does lower.
This is the MAIN reason the MMs are fighting so hard to keep Level 3 out of the hands of the investing public. They scream we should not have access to their complete book. This is so they can hide this illegal practice, and so we can't see their intent to steal the stop-loss shares of so many stocks on their slam campaign.
There are now 9000 hedge funds out there. Plus, the off shore factions that are involved. You can rest assured they have every security on the board covered. It's a little more than one per hedge.
Say what you will to "make us all crazies". It is happening...every stock...every minute...every day.
The American people will call for immediate reform and DEMAND no less than the following:
2). 300 attorneys at the SEC...gone.
3). DTCC reform and present officials...gone. No more protection of their illegal $50
bil. a year income.
4). A newly formed SEC comprised of private investors. An SEC formed solely for the purpose of which the Securities Act of 1934 called for...protection of the private
5). No security prospectus anywhere warns any investor of the perils of naked short selling. Therefore, the SEC by its own admonition has created a securities market
where they have openly committed fraud on the individual investor by allowing any
practice of naked short selling as a part of bonafide market making. By grand-
fathering all previous naked shorting previous to Jan. 2005, they are committing
a second fraud on the American investor. Therefore, the SEC shall immediately be
called to answer some 40000+ charges of fraud and market manipulation.
6). An immediate call of all outstanding short shares. The SEC does know exactly who is
naked short selling our securities. All companies will then re-issue their "auth-
orized" number of short shares. Since "the sum of the parts cannot be more than the
whole", then all the parts are deemed null and void. A private agency will then be
formed to administer the short shares of every US listed company. Seven days notice
will be required to locate the short shares of any US listed security.
7). There will be no more pools of short shares created on a daily basis as naked shares to
counteract the effect of buying on margin. This is called "kiting" shares. It is illegal anywhere else in the world with a check, and illegal in the markets. There is no accountability in this practice and no justification for it. It forces every stock on the board to have twice as
many buyers as sellers for it to appreciate in price.
8). Immediate enforcement of the uptick rule. No more shorting into the bid.
9). Immediate access to Level 3 for all investors. It is not a level playing field until it is a level playing field.
10). No more trading off the board by market makers. All trades must cross the tape
during market hours.
11). No more painting the tape by specialists. The 4pm close is the 4pm close.
12). Immediate reform and disclosure for all hedge funds. They changed the rules with-
out telling anybody. They won't mind if we demand changing the rules for the benefit of the private investor.
13). No get out of jail free cards. No deals. This is the largest crime in World History
and they all need to be made an example of. The practice of shorting should be a
scary endeavor where even the slightest news will cause panic. That was the way it
was designed. For years now, it has been the other way and anybody long a stock
cannot even sleep at nite because the criminals never sleep.
14). An immediate daily publication of all open short interest on a stock, with name or entity and number of shares.
15). Immediate delisting of all companies listed on foreign exchanges without the companies consent.
16). Immediate investigation of all media, reporters, and newswriters who have received funds for writing articles about any company. All payola payments will be found, off-shore accounts will be seized, and those involved immediately thrown in jail. I'm sure a good place to start is CNBC with their off-shore accounts and their blatant attack against Taser. There are a few thousand others. CNBC doesn't report news. They create news. There is no first amendment right to freedom of speech when you harm a stock price through a news story. Even airing a commercial for which you were paid is in fact receiving $$$ for airing slam stories against a company. News is news. Repeating the same news over and over is slamming. And CNBC is guilty as charged.
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