May 4, 2009
Just wanted to make a short comment that if one considers re-instituting an uptick rule, why is there not also consideration of a downtick rule?
Certainly I understand there may be issues with naked short selling which absolutely needs to be regulated strictly...
But how can one try to slow down the shorts without also trying to slow down the longs. They can just as easily do the same thing the shorts can... The only difference is nobody has a problem with it because it makes the price go up and your average investor looks at his 401k statement and loves that.
The market is just that... A market... People tend to forget that. Or more likely they are led to believe by marketing programs of financial institutions and people like Jim Crammer, that it is a savings account that is supposed to go up. It is not "supposed" to go up... If the inherent or perceived value of the companies within the market declines, prices are absolutely supposed to decline. Free short and long options are the only way to ensure proper price discovery.
Just for reference I am a very small, independent trader who trades both long and short and honestly I saw little or no change when the uptick rule was removed. But I feel very strongly that it is effectively market manipulation if you restrict either side of price discovery.
Thanks for your time
Michael Roddy