71 replies to this topic

[esther231]

Big sigh of relief. It's not as bad as I first thought while reading the thread. I'm sorry I didn't see the links posted. I think I went to panic mode. Remember when they banned shorting Freddie and Fannie? Didn't change anything but did give people a chance to make money on the rally and make money when it headed back down again after the ban.

Edited by esther231, 18 September 2008 - 09:09 PM.

[U.F.O.]

Everyone is still missing the bottom line here. EVERYTHING...repeat...EVERYTHING begins and ends with the cash equity market. Longs and shorts. When you buy an inverse fund like Rydex, somewhere down the line a short is ultimately placed in the actual shares involved in the basket you're shorting. Inverse funds use futures and options to effect their 200% or whatever target. Just because the actual investor might be able to avoid selling his cash position by buying the inverse fund, the net effect on the actual cash market is the same. The market makers will have to sell the basket of stocks short to hedge their futures position which was part of the Rydex trade. All roads lead to the cash market. U.F.O.

[milbank]

[url="http://"http://%5%20<a%20href="]http://www.marketwatch.com/"[/url]" target="_blank">http://w...tch.com/</a>

More there.

What more? I don't see any specifics or amplification.....

Can't do much about the specifics but I amplified it some.

Edited by milbank, 18 September 2008 - 09:34 PM.

[tommyt]

cgnx, you obviously don't understand how put options work. Do you think the option market makers live on an island and can just sell you put and call options to your heart's content? They have to hedge their option positions with the underlying stock. If they can't short the stock, you ain't gonna be buying no put options. That market will totally die with the "no shorts" decree. I was one of those guys...market makers can hedge with their underlying, or other options in that stock...but basically, when someone comes in and buys a bunch of options, it can raise the volatility on most other options in that stock. So, bottom line is that implied volatilities in a lot of equity options are going to stay high. Market makers are NOT going to give them away now that they know the gig...I'm guessing that when a stock starts to sell off, vols will shoot up fast. You want to play, you gotta pay. They can still work, just less bang for your buck.

[beta]

spielchekr wrote:

think we'd see hoarding of shorts to be salted away with hedges. Volume would go parabolic, maybe even truly vertical.

ps unless they do this immediately/tonight.

pss ahh, there we go. From tradethenews.com. It's now or never.

Today 09:04pmSEC's Cox declines to comment on press reports that SEC will temporarily ban short selling; Says that any announcement will be made ahead of the open on Friday

Totally agree -- I love my QID+SDS+SKF and buying tons on the open !!! (maybe sell them on Ebay)

Would it affect commodity futures?

What about gold futures?

And why do they have to do this "ahead of the open on Friday" -- that's like 5:30 am West Coast time, and so uncool barbaric and unfair !!!


p.s. heading over to the goldboard for Margaritas ...anyone got a pitcher ?

Edited by beta, 18 September 2008 - 09:39 PM.

[SemiBizz]

AND EVERY MOVE THEY MAKE IS A MANDATORY... FORCED MOVE in the MIDDLE of the NIGHT... NOTHING BUT CRISIS MOVES.... ALL OF THEM They act as if waiting til things blow up IS THEIR # 1 STRATEGY... THIS IS A COMPLETE OUTRAGE !!

[IYB]

spielchekr wrote:
And why do they have to do this "ahead of the open on Friday" -- that's like 5:30 am West Coast time, and so uncool barbaric and unfair !!!

5:30 AM? I wish!!!

[spielchekr]

Today 10:29pm TTN analysis: If the SEC temporarily bans short selling, it will actually INCREASE the cost to banks of raising new capital, and the market's floor might be removed - "The Securities and Exchange Commission took its most aggressive assault against bearish stock bets by stating its intention to issue a temporary ban on short-selling," writes the WSJ. "SEC Chairman Christopher Cox briefed Congress late Thursday of the agency's intention to take the extraordinary step of interfering with the market's regular functioning." - This move will affect hedge funds that use short positions to hedge investment risk during a rights issue or placing. If they're not able to provide liquidity during a rights issue, the costs to banks of raising new capital will increase. - Shorts provide a floor, buying (i.e. covering shorts) when there is no one left to buy. If you can't short, the only way to reduce your risk is to sell, which may exaggerate downside pressure in the event of a market sell-off. A simple illustration: Look at China's stock market, where no short selling is allowed. The Shanghai composite went from 6100+ to 1800 in the space of a few months...

[beta]

spielchekr wrote:
And why do they have to do this "ahead of the open on Friday" -- that's like 5:30 am West Coast time, and so uncool barbaric and unfair !!!

5:30 AM? I wish!!!

seriously, the worst part of vacationing in Maui is getting up at like 2:30 am to check on the market open --- ! (at least parts of kanaapali have gone wireless)

[senorBS]

spielchekr wrote:

think we'd see hoarding of shorts to be salted away with hedges. Volume would go parabolic, maybe even truly vertical.

ps unless they do this immediately/tonight.

pss ahh, there we go. From tradethenews.com. It's now or never.

Today 09:04pmSEC's Cox declines to comment on press reports that SEC will temporarily ban short selling; Says that any announcement will be made ahead of the open on Friday

Totally agree -- I love my QID+SDS+SKF and buying tons on the open !!! (maybe sell them on Ebay)

Would it affect commodity futures?

What about gold futures?

And why do they have to do this "ahead of the open on Friday" -- that's like 5:30 am West Coast time, and so uncool barbaric and unfair !!!


p.s. heading over to the goldboard for Margaritas ...anyone got a pitcher ?

Senor ALWAYS has a pitcher ready to go amigo! Don't short those margs!

NO BS

Senor