Bring Back the Uptick Rule!

madhedgefundtrader's picture

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chinawholesaler's picture

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Zero Govt's picture

"Needless to say, if you or I tried any of these shenanigans, the SEC would lock us up in the can so fast it would make your head spin."

Actually it's the complete incompetence of the SEC (and all regulators worldwide) and how they maintain their worthless existence, even have the temerity to call for "more money" in the face of their record for total ineptness and failure, that makes my head spin

WSP's picture

" Are market authorities and regulators being penny wise, but pound foolish?"

Absolutely NOT.   The "authorities and regulators" (a.k.a. kleptocrats) have lots of financial needs, and they get a "cut" off of all the corruption.  Think of them just as you would Jon Gotti with a dash of Bernie Madoff.  

And have you no sympathy?  This "scheme" only generated 65 million in profits, but better days lie ahead once they convince the sheeple to trade more in our "Free markets".  Better days are ahead.

chirobliss's picture

Hey MadHedge, shut up and trade.  Stop cryin' in yer conflakes.

You'll be asking them to ban shorting altogether next.

ItsDanger's picture

Waste of time.  They should just ensure that shares traded actually exist for once.

ATG's picture

Double darn:

John Thomas Jolly Rodger MHFT arguments prove flaccid yet again.

Pool operator Joe Kennedy instigated the cosmetic feelgood uptick rule Germany still has to no avail when he became first SEC boss in 1938 during the last Depression.

Somehow, stocks keep going down and up, mostly down in real terms since we re-entered Depression in 2000.

It was downhill since 1938, FDR and Joe Kennedy for John Q Public, now abandoning electronic virtual markets in droves after being fleeced again and again by Wall Street and the District of Criminals.

Somehow the futures exchanges continued to thrive without the uptick rule, which 85% of NYSE members favoured, despite empirical evidence the uptick rule reduced market liquidity. Hmmm. Does less liquidity mean bigger profits for members?

Gary Ackerman, Ben Bernanke, Mike Capuano, Chris Cox, Jim Cramer, Barney Frank, Carolyn Maloney, John McCain, Mickey Siebert, Wachtell, Lipton, Rosen & Katz all favour throwback return to the uptick rule with their vested interests that may not benefit the majority.

The uptick rule was eliminated by the SEC in 2007 after actual security exchange trading studies without it dating from 2004 found no benefit of the atavistic rule.

As several here suggested, requiring the public to borrow shorts while JPM Morgan et al continue to trade nakeds is a giant indictment of government regulation failures to enforce back dating options, conflicts of interest, failure to deliver, fake quotes, front-running, major insider violations, mark to market, painting the market or transparency.

The only good news about naked shorts is JPM short 50 B ounces of silver. Too bad the government they own lets them not mark to market. One of these days Jamie...

bid the soldiers shoot's picture

SEC ends up tick rule July 6, 2007
DOW turns down from its all-time high of 14,000 July 19, 2007.

Pay no attention to the man behind the curtain.

ATG's picture

Actually, they eliminated it in 2004 as a study

http://en.wikipedia.org/wiki/Uptick_rule

Correlation is not causation

 

bid the soldiers shoot's picture

"In 2004, the Commission initiated a year-long pilot that eliminated short sale price test restrictions from approximately one-third of the largest stocks. The purpose of the pilot was to study how the removal of such short sale price test restrictions impacted the market for those subject securities."

1/3rd is not all stocks.

1 year is not till up to today.

Find out how many of the Dow 30 were in the pilot and let me know.

TooBearish's picture

Dream on MHFT - since exchanges de-mutualized an exist as for profit entities the raping will continue sos they may rent out colocated server farms for 200K/month and latency arb Etrade point and click traders - welcome to the 21st century economy bitch

DeweyLeon's picture

Since we're talking about bringing things back how about bringing back the gold standard and the Dukes of Hazzard.

alien-IQ's picture

and 8 track tape decks.

the last bagholder's picture

What is the real solution to black box trading? An outright ban is the wrong way, that's the Ned Ludd solution. That said, the machines need to be regulated. The retail investor is getting annihilated.

ww2vet's picture

some (small) truth in this article but REAL problem with shorts is that most are illegal- gs, ms never borrow, never deliver. short sale rules are FEDERAL rules.but noone goes to jail

Hulk's picture

The uptick rule and glass steagal are gone forever. The government will not reverse bad decisions, unless lobbied to do so...

tradewithdave's picture

...and destroy the entire high frequency trading industry. What about that hotel near the NYSE with all those servers? What about the 100 quants employed by the prime brokers. Have you no mercy? We need to scalp every $7 ScotTrade and Fidelity ActiveTrader. It's capitalism at its most blatant.... finally an "invisible hand" that works for a living. John Locke would be proud. No uptick for anyone but those who can afford their own rule, lobby and congressman. It's not personal... just business... monkey business. Don't monkey with it.

Dave Harrison
www.tradewithdave.com

alien-IQ's picture

funny how you only complain when this bloated market gets whacked but are perfectly happy to see it get ramped to unjustifiable stratospheres on vapor volume.

Have you considered that the heavy volume selloffs are the truth and the vapor volume meltups are the lie?

Tuffmug's picture

Uptick rule is an inflationary bias for stocks. Glad it's gone. If you want to tame HFT then require 1 cent fee per phantom bid/ask and most of the HFT abuses will disappear.  

DavosSherman's picture

Pretty fucking amazing how a million bloggers know HFaT is illegal bullshit and because some naked babe isn't wearing a trampstamp tat that says "HFaT is insider trading" on her ass some masterbating sec moron can't figure it out.

Right up there with Moron Greenspan and Moron Summers muzzling Brooksley Born's who wanted to protect us from the derivative timebomb.

 

Ned Zeppelin's picture

Don't forget Moron Rubin, The Third or "Shemp" of the Three Stooges.

Or was he Curly Joe. 

Robslob's picture

 

 

 

Madhedgefund trader and other "men of money" will cry for anything to sustain an already broken and corrupt market.

People whos sole existance is to take a pile of crap currency and turn it into a larger pile of crap currency IS the main reason economies die.

Money was only to be used as a means of exchange...not a means to grow a pile of paper and declare that you did something good for humanity.

All men of money should take gun, insert in mouth and pull trigger...shortly after the economy will fix itself and the rest of us PRODUCTIVE human beings can get on with our lives...without worry of the value of that money.

 

 

adr's picture

They won't ever stick the gun in their mouth, but we can do it for them and make it look like suicide.

LawsofPhysics's picture

How about prosecuting fucking fraud and having some of these fucks go to a real prison for a change.  I bet that alone would do wonders for the "free markets" LOL!

disabledvet's picture

apparently the down trick...i mean "tick"...rule isn't working either.

Ruffcut's picture

and glass steagle, too.

and jail time for fraud, too

 

Everybodys All American's picture

Bring back marked to market

HCSKnight's picture

You are too kind, MHT is an idiot of the Friedman order.

re: "The diminished liquidity might make it difficult for the 800 pound gorillas of the market, like Fidelity and Caplers, to execute trades, further frightening end investors from equities."

Really?  Really?  Gosh, what did they do before HFTs?... Hmmmmm

Leopold B. Scotch's picture

Nahh. Just bring out the gimp!