Short sellers are unpatriotic?
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Agreed. Propping up bloated and fatally flawed businesses at the expense of actual productive companies is socialism and doesn't make America more competitive.
guns don't kill people...ever heard that line?
Naked Short Sales Hint Fraud in Bringing Down Lehman (Update1) - Bloomberg.com March 19 (Bloomberg) -- The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year?s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn?t settle within three days.
?We had another word for this in Brooklyn,? said Harvey Pitt, a former SEC chairman. ?The word was ?fraud.??
While the commission?s Enforcement Complaint Center received about 5,000 complaints about naked short-selling from January 2007 to June 2008, none led to enforcement actions, according to a report filed yesterday by David Kotz, the agency?s inspector general.
The way the SEC processes complaints hinders its ability to respond, the report said.
Twice last year, hundreds of thousands of failed trades coincided with widespread rumors about Lehman Brothers. Speculation that the company was being acquired at a discount and later that it was losing two trading partners both proved untrue.
After the 158-year-old investment bank collapsed in bankruptcy on Sept. 15, listing $613 billion in debt, former Chief Executive Officer Richard Fuld told a congressional panel on Oct. 6 that naked short sellers had midwifed his firm?s demise.
Gasoline on Fire
Members of the House Committee on Government Oversight and Reform weren?t buying that explanation.
?If you haven?t discovered your role, you?re the villain today,? U.S. Representative John Mica, a Florida Republican, told Fuld.
Yet the trading pattern that emerges from 2008 SEC data shows naked shorts contributed to the fall of both Lehman Brothers and Bear Stearns Cos., which was acquired by JPMorgan Chase & Co. in May.
?Abusive short selling amounts to gasoline on the fire for distressed stocks and distressed markets,? said U.S. Senator Ted Kaufman, a Delaware Democrat and one of the sponsors of a bill that would make the SEC restore the uptick rule. The regulation required traders to wait for a price increase in the stock they wanted to bet against; it prevented so-called bear raids, in which successive short sales forced prices down.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year?s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn?t settle within three days.
?We had another word for this in Brooklyn,? said Harvey Pitt, a former SEC chairman. ?The word was ?fraud.??
While the commission?s Enforcement Complaint Center received about 5,000 complaints about naked short-selling from January 2007 to June 2008, none led to enforcement actions, according to a report filed yesterday by David Kotz, the agency?s inspector general.
The way the SEC processes complaints hinders its ability to respond, the report said.
Twice last year, hundreds of thousands of failed trades coincided with widespread rumors about Lehman Brothers. Speculation that the company was being acquired at a discount and later that it was losing two trading partners both proved untrue.
After the 158-year-old investment bank collapsed in bankruptcy on Sept. 15, listing $613 billion in debt, former Chief Executive Officer Richard Fuld told a congressional panel on Oct. 6 that naked short sellers had midwifed his firm?s demise.
Gasoline on Fire
Members of the House Committee on Government Oversight and Reform weren?t buying that explanation.
?If you haven?t discovered your role, you?re the villain today,? U.S. Representative John Mica, a Florida Republican, told Fuld.
Yet the trading pattern that emerges from 2008 SEC data shows naked shorts contributed to the fall of both Lehman Brothers and Bear Stearns Cos., which was acquired by JPMorgan Chase & Co. in May.
?Abusive short selling amounts to gasoline on the fire for distressed stocks and distressed markets,? said U.S. Senator Ted Kaufman, a Delaware Democrat and one of the sponsors of a bill that would make the SEC restore the uptick rule. The regulation required traders to wait for a price increase in the stock they wanted to bet against; it prevented so-called bear raids, in which successive short sales forced prices down.
That's naked short selling, which is illegal. This also isn't proven, I've seen some posts on it and it may well just be an anomoly in the numbers. Regardless, there is a difference here between the legal form of short selling and the illegal kind. You appear to be roping the two together.
yes, i am
Hey TraderX
Interesting to find a Trader on a message board such as this. There are trading boards enough, heaven knows, but they tend to be dominated by spam, shysters, professional shills or bashers. Everyone is touting their own particular investment and trashing everyone elses. It can get tedious reading them it really can.
Just wondering what your strategy is in this highly volatile market? Anything you particularly like long or short just now?
Do you trade FX and commodities or mostly stocks? Are you employed by a firm or trading on your own account?
Interesting to find a Trader on a message board such as this. There are trading boards enough, heaven knows, but they tend to be dominated by spam, shysters, professional shills or bashers. Everyone is touting their own particular investment and trashing everyone elses. It can get tedious reading them it really can.
Just wondering what your strategy is in this highly volatile market? Anything you particularly like long or short just now?
Do you trade FX and commodities or mostly stocks? Are you employed by a firm or trading on your own account?
I trade my own account. I am typically a swing trader but in this environment, I only trade on hourly graphs. Never daytrade; don't have the quick fluid crazy mind required.
I am trading ETF's in this environment. Individual stock risk is high so don't wanna go there. I do my best to avoid a long or short orientation.
I trade my own account. I am typically a swing trader but in this environment, I only trade on hourly graphs. Never daytrade; don't have the quick fluid crazy mind required.
I am trading ETF's in this environment. Individual stock risk is high so don't wanna go there. I do my best to avoid a long or short orientation.
Interesting.
I have never mastered TA, as you clearly have. Indeed most traders. The human mind has a need to see patterns I guess, and you guys obviously do, but to me short term moves just look totally random.
Also you wonder why TA would actually work? Why would (say) a head and shoulders pattern be a predictor of a move just because it did once? If some great shocking news event takes place the stock flies or tanks accordingly whatever the chart might indicate. If the Bollinger bands are tightening or not!
The nearest I can think of to get my head round it is that so many pro traders use it that the perceived TA points of resistance and support actually become so. Like a self fulfilling prophecy. Then if the traded instrument breaks out there is a rush for shorts to cover or longs to bail perpetuating the move in whichever direction this takes place.
Still it works for some people. And not just the vendors of charting software!
I am a fundamentalist myself, although obviously I keep a close watch on the charts. With a long term time frame by your standards.
Was going to swap trading ideas but if you are a chartist we aren't really on the same page unfortunately.
Best of luck anyway!