I’m a financial planner and I generally hate additional regulations. That said, I think getting rid of naked options could be a good idea.
Interesting that they want to immediately stop naked short selling of companies that can’t produce audited financial statements (e.g. FNM) but don’t have any problem with naked shorting of real companies that trade on the bboards that do produce audited statements, nor of the silver ETF SLV, which is supposed to be backed by real silver but can’t possibly be if nakedly sold short.
The SEC will also consider new rules to extend those trading limits to the rest of the market.
The camels nose in the tent?
Not the way to characterize it. Short selling is selling something you have borrowed (normal and desirable activity in a capital market). Naked short selling is selling without even borrowing the shares (illegal and undesirable). There are variations, such as re-selling borrowed shares which were already committed to a prior short sale. This is what the primary dealers have been doing.
How about just cutting Schumer’s vocal cords?
They need to reinstate the uptick rule fast!
I have been buying shares of both companies in lots of 100 since last week as the price continue to plunge. Both are “on sale”. It’s a good time to get them at rock bottom prices if you plan on holding them for the long haul.
The SEC should stick to winning football championships.
The SEC would do NOTHING (picture Cramer screaming) about naked short selling when it was just killing the retail investor. Now that it is attacking the foundations of the capital markets maybe it is a good idea to enforce the law after all.
I day trade the market daily. I have sold short exclusively since January and I have not entered into a long position since January. It is my understanding naked short selling is illegal, but I imagine it goes on. The SEC was a pathetic agency before Chris Cox took it over and he has done nothing to change that. If you are not buying stock long on margin, then you should tell your broker that you do not want your stock available to be borrowed for shorting purposes. As far as the downtick rule goes, I do not care if it reverts back. I was a profitable trader before it came about and I will adjust. But getting rid of the downtick rule has created more intraday trading range and for intraday traders who are willing to take both sides of a trade like myself it has created more opportunities at least on the NYSE as I never trade four letter stocks.
This naked short crap (and worse) has been going on for some time, and NOW they decide to act? Where have they been all this time? What, it only matters because it is Fannie Mae and Mac - who likely deserve to fail anyways?
What about investment houses that collude to short raid a stock? I hope the SEC looks into that as well.