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pretty simple question really...
let's say world wide...
let's say world wide...
Should shorting be suspended/banned?
- Thread starter sam76
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Stuff shorts. Ban excessive leverage on ASX-listed companies.
white_goodman
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how else would i make money atm?
it helps give better indications to value to shares
it helps give better indications to value to shares
wayneL
VIVA LA LIBERTAD, CARAJO!
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Yep that's more to the point.
Banning shorts would cause more selling. Why?
Because option market makers need to be able to short shares to balance their greeks.
Without short selling, MMs would have to lift option IVs to ridiculous heights to account for the additional risk they take on.
This will make puts too expensive a hedge for portfolio holders and they will be more inclined to sell than hedge.
Be careful what you wish for.
wayneL
VIVA LA LIBERTAD, CARAJO!
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...also no short covering rallies.
Shorting actually supports prices folks, as discussed elsewhere on this forum.
Shorting actually supports prices folks, as discussed elsewhere on this forum.
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Who are the clowns who voted yes?
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As with any game, changing the rules once one side starts losing isn't exactly fair. At best, it would further harm the credibility of markets at a time when that really wouldn't be helpful.
Just like changing the rules half way through a sports game, it makes the whole thing look like a farce.
Just like changing the rules half way through a sports game, it makes the whole thing look like a farce.
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A suspension or a ban is definitely too much, I think, however, some sort of a control would be good. I mean, we can still make money, but it's probably not a good idea to be able to just short companies into oblivion.
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The market must be a balanced system for it to work correctly...
With only buyers allowed to take new long positions, the market will grow at an unhealthy rate. Bring in the shorters and it will normalise the growth and keep the market under a reasonable fair value...
With only buyers allowed to take new long positions, the market will grow at an unhealthy rate. Bring in the shorters and it will normalise the growth and keep the market under a reasonable fair value...
Garpal Gumnut
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Its an accepted market practice.
gg
gg
Whiskers
It's a small world
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No not that simple. I'd be happy just banning 'naked' shorts.
Ban excessive leverage per se. But don't ask me yet what is an 'excessive' level.
wayneL
VIVA LA LIBERTAD, CARAJO!
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Some of you are missing the point. Shorting does not cause the market to go down. Ordinary longs selling out causes the market to go down.
For the thousandth time, shorters MUST BE BUYERS again at some stage. Ordinary sellers may sell and NEVER BUY THAT STOCK AGAIN.
Shorters cause upward pressure, not downward
For the thousandth time, shorters MUST BE BUYERS again at some stage. Ordinary sellers may sell and NEVER BUY THAT STOCK AGAIN.
Shorters cause upward pressure, not downward
Kauri
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Looks like the FSA has seen our poll and is casting its vote..
The latest headlines out of the UK have reported that the FSA will ban short-selling of financial stocks from midnight local time on Thursday under rules drawn up by the FSA. The ban will remain in force until January 19, 2009 at which point the FSA will publish official rules on short-selling. The ban is in response to growing calls from investors and authorities to implement policies that will mitigate the current financial markets turmoil. They are also opening a stall on High St. selling second-hand Bandaids..
Cheers
...........Kauri
The latest headlines out of the UK have reported that the FSA will ban short-selling of financial stocks from midnight local time on Thursday under rules drawn up by the FSA. The ban will remain in force until January 19, 2009 at which point the FSA will publish official rules on short-selling. The ban is in response to growing calls from investors and authorities to implement policies that will mitigate the current financial markets turmoil. They are also opening a stall on High St. selling second-hand Bandaids..
Cheers
...........Kauri
Kauri
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DJ is reporting that CALPERS will no longer lend out shares of Goldman and Morgan Stanley. The FSA announced today that they were putting a ban on short selling of UK financial stocks. Meanwhile SEC"s Cox is nowhere to be seen, with no uptick rule and essentially no restraints being made on short sellers. At least some hedge funds will be making some money in this. Try doing your banking at your neighborhood hedge fund Mr. Cox.
The DJIA is up 122 pts and the dollar has recovered slightly on word that at least somebody somewhere is taking steps to stop the madness in the financial sector.
Cheers
...........Kauri
The DJIA is up 122 pts and the dollar has recovered slightly on word that at least somebody somewhere is taking steps to stop the madness in the financial sector.
Cheers
...........Kauri
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I remember reading somewhere that nobody has ever shown that shorters were responsible for driving the price of a stock down
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From the horses mouth overnight....
"New York on Thursday began a probe into possible illegal short-selling in the stocks of Wall Street companies such as Goldman Sachs Group Inc and Morgan Stanley, Attorney General Andrew Cuomo said.
Cuomo said on a conference call with reporters: "I want the short-sellers to know today that I am watching. If it is proper and legal then there is nothing to worry about."
He said his office was concerned about destabilization of financial markets, which are suffering their worst crisis since the Great Depression of the 1930s.
The New York State prosecutor said his office also would look back into illegal short-selling that may have occurred in stocks of Lehman Brothers Holdings Inc and American International Group Inc, two companies at the heart of the crisis.
In the past week, Lehman has gone bankrupt and the insurance giant was rescued by the U.S. government.
"This investigation will not only encompass short-selling of Lehman Brothers and AIG but also short-selling in other companies that may be occurring, like Morgan Stanley and Goldman Sachs," Cuomo said.
The prosecutor said he believes the SEC should freeze short-selling of financial sector stocks on a temporary basis, perhaps for 30 days.
In a statement, Morgan Stanley welcomed the investigation to uncover improper short-selling of financial stocks."
Full article here....
http://www.reuters.com/article/newsOne/idUSN1834283220080918
Seems to be some concern that a significant proportion of shorts were of the "illegal" variety.
In the meantime, DOW up over 400pts (shorts covering??)
)
aj
Also just found this - SEC rules now confirmed?
http://compareshares.com.au/show_news.php?id=S-516056
"New York on Thursday began a probe into possible illegal short-selling in the stocks of Wall Street companies such as Goldman Sachs Group Inc and Morgan Stanley, Attorney General Andrew Cuomo said.
Cuomo said on a conference call with reporters: "I want the short-sellers to know today that I am watching. If it is proper and legal then there is nothing to worry about."
He said his office was concerned about destabilization of financial markets, which are suffering their worst crisis since the Great Depression of the 1930s.
The New York State prosecutor said his office also would look back into illegal short-selling that may have occurred in stocks of Lehman Brothers Holdings Inc and American International Group Inc, two companies at the heart of the crisis.
In the past week, Lehman has gone bankrupt and the insurance giant was rescued by the U.S. government.
"This investigation will not only encompass short-selling of Lehman Brothers and AIG but also short-selling in other companies that may be occurring, like Morgan Stanley and Goldman Sachs," Cuomo said.
The prosecutor said he believes the SEC should freeze short-selling of financial sector stocks on a temporary basis, perhaps for 30 days.
In a statement, Morgan Stanley welcomed the investigation to uncover improper short-selling of financial stocks."
Full article here....
http://www.reuters.com/article/newsOne/idUSN1834283220080918
Seems to be some concern that a significant proportion of shorts were of the "illegal" variety.
In the meantime, DOW up over 400pts (shorts covering??)
)aj
Also just found this - SEC rules now confirmed?
http://compareshares.com.au/show_news.php?id=S-516056
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Seems the stick is being pointed at those 'nasty' hedge funds and their shorting practices instead of the true problem of easy credit in boom times. The US system encourages huge risk taking, and in boom times you'd be a mug not to join in - but the bubble will always get too big and then you get what we have now.
The existence of shorting just gves everyone the chance to punish a stock, holder or not. I do struggle with the concept of selling something that I don't actually own and I do think it can open the market up to manipulation. Should shorting exist at all? Hmm my gut says no, should we ban it now? Definitely not, but perhaps the rules need to be tightened, instances of manipulation should be looked at closely so that the rules can prevent them in future. And for crying out loud, if people are cheating then throw em in jail!!!
The existence of shorting just gves everyone the chance to punish a stock, holder or not. I do struggle with the concept of selling something that I don't actually own and I do think it can open the market up to manipulation. Should shorting exist at all? Hmm my gut says no, should we ban it now? Definitely not, but perhaps the rules need to be tightened, instances of manipulation should be looked at closely so that the rules can prevent them in future. And for crying out loud, if people are cheating then throw em in jail!!!
CanOz
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From the horses mouth overnight....
"New York on Thursday began a probe into possible illegal short-selling in the stocks of Wall Street companies such as Goldman Sachs Group Inc and Morgan Stanley, Attorney General Andrew Cuomo said.
Cuomo said on a conference call with reporters: "I want the short-sellers to know today that I am watching. If it is proper and legal then there is nothing to worry about."
He said his office was concerned about destabilization of financial markets, which are suffering their worst crisis since the Great Depression of the 1930s.
The New York State prosecutor said his office also would look back into illegal short-selling that may have occurred in stocks of Lehman Brothers Holdings Inc and American International Group Inc, two companies at the heart of the crisis.
In the past week, Lehman has gone bankrupt and the insurance giant was rescued by the U.S. government.
"This investigation will not only encompass short-selling of Lehman Brothers and AIG but also short-selling in other companies that may be occurring, like Morgan Stanley and Goldman Sachs," Cuomo said.
The prosecutor said he believes the SEC should freeze short-selling of financial sector stocks on a temporary basis, perhaps for 30 days.
In a statement, Morgan Stanley welcomed the investigation to uncover improper short-selling of financial stocks."
Full article here....
http://www.reuters.com/article/newsOne/idUSN1834283220080918
Seems to be some concern that a significant proportion of shorts were of the "illegal" variety.
In the meantime, DOW up over 400pts (shorts covering??)
aj
I can just imagine the other wall street buddies cringing at that MS comment.....they all naked short sell, what a load of crap. As if GS and MS wouldn't be in there digging the knives into the other brokerages! The media buys it because its easier to explain as a reason for drops in stock prices and they do this every time there is a significant correction.
The fact is that the SEC cannot do anything to stop the bleeding but are under pressure to do something from that clown Bush and his mates.
The US likes it's markets functioning when it suit's them. They're always saying "let the markets decide", and yet this year we've seen more meddling in markets than ever before. What a bunch of incompetent hypocrites.
CanOz
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