Financial stocks short selling ban

As far as I know, it is scheduled to expire today. Has anyone heard of an extension?

 

No extension yet, but there is talk they will bring back the uptick rule...either way...Tomorrow will be black Thursday IMO becuase all these financials are going to get clobbered...dow 8500 thur/friday

 

is the pre borrow requirement still in effect......or can one just go off the ETB list and short away

Thanks

 

Any update yet?

 

GOD DAMN IM GOOD!!!

 

Yes, nice call

 

i think tom. we will be up 350 as the talkign heads on CNBC tell everyone that " Buyers confidence has retruned"....after the Shorters are done covering they will load up for 'bear' and monday and repeat todays action to the tune of 5-600 down side.

 

Did I miss a piece of news on this?

 

TM_Direct


Registered: Oct 2002
Posts: 5133


10-08-08 01:29 PM

No extension yet, but there is talk they will bring back the uptick rule...either way...Tomorrow will be black Thursday IMO becuase all these financials are going to get clobbered...dow 8500 thur/friday

 

Share price falls blamed on short selling return

By Joanna Chung, Francesco Guerrera, Julie MacIntosh and Anuj Gangahar in New York and Bernard Simon in Toronto

Published: October 9 2008 19:05 | Last updated: October 9 2008 19:05

The return of short sellers to the US market after a near-three-week ban was blamed for a sharp drop in prices on Thursday as General Motors and Morgan Stanley led stock markets sharply lower.

In another rollercoaster trading day, shares in Morgan Stanley were 16 per cent lower at $14.09 at midday in New York, while GM shares had lost 15 per cent of their value shortly before noon, falling to $5.87, their lowest level since the early 1950s.
EDITOR’S CHOICE
Lex: Shorts are back - Oct-09
Full coverage: Regulating short selling - Sep-23
Lex: Shorting in China - Oct-06
Markets braced for end of short-selling ban - Oct-09
Have your say: Mark-to-market accounting - Oct-01
Hedge funds face loss of investors - Sep-29

The share price declines coincided with the lifting of a ban on traders who aim to profit from share price declines. The ban had prevented short selling on nearly 1,000 companies, including financial firms and industrial groups such as GM. The ban was lifted by the US Securities and Exchange Commission late on Wednesday night.

Morgan Stanley insiders said they expected short-sellers to target its shares on Thursday but added that the sharp fall would not affect the bank’s deal to sell a 21 per cent stake to Japan’s Mitsubishi UFJ Financial Group for $9bn.

Michael Ward, analyst at Soleil Securities, was among those who linked the latest tumble in GM’s share price to the lifting of the ban. Other analysts ascribed the selling pressure to worries about the carmaker’s ability to continue funding its operations in the face of the credit crunch and weakening sales.

Indeed, the return of short selling was welcomed by many traders, who said it helped bring liquidity to the markets. Many noted that shares of many companies on the banned list were hit sharply in recent weeks despite the short selling ban.

While the ban may have created an initial short squeeze that buttressed financial stocks, traders say hedge funds were then forced to bring down their corresponding long positions in other financial stocks, which created new selling pressure.

“I’m not sure whether today’s activity is a continuation of long selling or if it’s the shorts piling on,” one trader said. “My guess is that it’s a combination of the two.”

Many market participants believe regulators will be forced to quickly bring back measures similar to the so-called “uptick” rule. The rule, which was scrapped last year, allowed short selling only when the last tick in a stock’s price was positive.

Copyright The Financial Times Limited 2008