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i've said from the start (not on FR, but to friends) that round 2 is an attack on our financial markets. there is no telling how long conspirators have been accumulating short positions, i would like to see all short sales prior to september 11th frozen at market close pps on the 10th. i think we need to give investigators enough time to sort out the details. those short-sellers who are cleared after investigation, could reap their rewards at a later date and consider themselves lucky.

in addition, declare a temporary moratorium on future short-selling... it can be done:

"regulatory authorities could prohibit short selling, says Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum, who remembers when the American Stock Exchange banned shorting shares of the formerly public Home Shopping Network."

Shorting individual stocks is time and capital consuming, leaving a long paper trail.

It is FAR more efficient to short futures or buy put options on indicies.

You want leverage? Buy short-dated out-of-the-money puts on S&Ps - interestingly, the Sep series expires this week.

I dare say trading records are going to be examined VERY carefully.

BTW, I am NOT short.

You might be right. As a trader, there is nothing more gratifying than shorting a stock at the proper time. You "feel" a stock at the precipice, with vested interests trying to prop it up that are already long up the wazoo, running short on staying power.

If you play it right, there is nothing more rewarding [in the profit and gamemanship sense] than a good play on the short side. If you're wrong you are screwed.

FWIW: I got pretty good at it. I perceived it to be very nonproductive, which is why I don't trade anymore.

i've said from the start (not on FR, but to friends) that round 2 is an attack on our financial markets. there is no telling how long conspirators have been accumulating short positions, i would like to see all short sales prior to september 11th frozen at market close pps on the 10th. i think we need to give investigators enough time to sort out the details. those short-sellers who are cleared after investigation, could reap their rewards at a later date and consider themselves lucky.

Hard to disagree with that idea, 'cuz I'm sure there are a bunch of people in the know who had an idea of making a killing on the killing. but I don't understand how massive short selling beforehand per se would have injured the American markets. What with the automatic clamps in place, any significant crash will take days - long enough for the SEC to build a case to freeze their assets.

Even without that, how would short selling before the tragedy hurt the market? I never completely understood short selling: Doesn't the short seller borrow shares from their broker in order to sell them to open the position? And if it's a really big order, doesn't the broker have to buy up shares to lend to the short seller? Or if it's spread over "reasonable" sized orders among several brokers, don't the trades still deplete their inventory of shares, making it more likely that they would be buying up more shares to keep their inventory stocked?

I understand how they could make a killing when they buy the shares back at the lower price, but the only way I can see this hurting the economy is if the opening sale produced an overhang of shares in the market somehow. Am I missing something?