April 28, 2009
A brief comment on the "Uptick Rule" of 1938.
In 1930's there were 850 listed stocks, today there are 7300.
In 1930's there were no futures on the stock index. Today there are futures.
If the uptick rule is reinstated (it is axiomatic that ETF's would be subject to the same rule) short sellers will flock to the futures. We will then have the real opportunity to witness another 1987 type of crash.
Why would anyone consider shutting down 7300 avenues for downtick short selling, while leaving only a small amount open? It simply defies logic.