May 19, 2009
The return of the uptick rule would be the appropriate move to restore a more normally functioning market in my opinion. The short sale rule is an artificial boost of buyers and sellers in a reverse order (selling before buying.) The uptick rule allows the market maker to not get over burdened with short sales that can lead to extreme imbalances between buys and sales. The lack of the uptick rule had lead the market maker to move stocks irrational wildly to try to balance inventories. Hitting the small investors disproportionatly hard, and reducing the demand of the public in securities. Hurting the industry.