May 5, 2009
I believe that generalities have their place but SPECIFICS are what's needed to demonstrate the need for reinstitution of the uptick rule. A look at trading in DNDN on April 28th, 2009 will demonstrate why this rule is so necessary. The stock moved down from above $22 to $7.50 in less than 60 seconds with no news taking out multiple stop loss orders and leaving retail investors who put those orders in place in good faith with no stock when the stock reopened above $25. Now, I ask you, is there any feasible way that this could have occurred if a form of the uptick rule were in place? Of course not. And this is just one example.
If one takes a look at the trading in the financials earlier in the year you will see similar examples.
Again, SPECIFIC EXAMPLES are what are needed to demonstrate how people are getting hurt and these things need to be personalized to make the point.
I hope the SEC does the right thing.
One last comment about comments that reinstituting the rule would be difficult: the right decision is typically the one that is more difficult.
Regards,
Bardia Nahidi