Who as a buying stockholder would be selling so heavily when such good news arrived? How many US cities have trial sites and what is occuring Maybe, since it is so easy to short a stock that the short sellers who by the way OWN NO SHARES were able to borrow them, and sell them short for a profit. On whose dime was that? Ours we had to invest our hard earned dollars so there is liquidity for them to borrow our shares short and take that money out as profit to them and at our expense? What did they buy, what responsibility do they have to shareholders? NONE. From my standpoint they are stealing our money easily without impunity and with the uptick rule that would be limited.
Known as Rule 10(a)(1) of the Securities Exchange Act of 1934, the uptick rule allows investors to short a security only at a price higher than the security's last trade.
The uptick rule states that you cannot sell a stock short on a down tick. You must wait until the price of the stock you are looking to sell short has an uptick before you can enter your trade. In theory, this rule is supposed to reduce dramatic bear runs on stocks that are fueled by short sellers.
was originally created by the Securities and Exchange Commission (SEC) in 1938 to prevent short sellers from conducting bear raids on companies whose stock prices were falling lower and lower and lower. Sixty-nine years later, at the end of 2007, the SEC dropped the uptick rule. However, there are rumblings on Wall Street and in Washington that the uptick rule might be brought back.
Bringing the Uptick Rule Back
During the financial sector meltdown on Wall Street in 2008, the SEC temporarily banned short selling on financial stocks like Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) in an attempt to help stabilize their stock prices.
This measure seemed to slow the decent of these stocks, but in the long run, many financial stocks continued to drop to just above penny status.
Even so, in a recent testimony before the House Financial Services, Fed Chairman Ben Bernanke said reinstating the uptick rule across all stocks, not just financial stocks, “might have had some benefit” on stock values during the market collapse.
If the SEC does, in fact, reinstate the uptick rule, watch for stock prices to stabilize somewhat in the short term.