Jetlag Posted September 19, 2008 Report Share Posted September 19, 2008 I'm gonna play devils advocate here.... I think all the bear wailing on M2M yesterday re: banning of short selling financial stocks was quite ironic. With the news of the massive coordinated global liquidity injections into the financial markets yesterday morning the writing was on the wall, well in advance for any bear to take profits. Yesterday may well have been a capitulation low in the financial sector regardless of the new non-shorting rules (for financial stocks). Seems that these rules have been brought in after the damage had been done. Bulls are successfull in a bull markets because they rotate sectors. We are in a bear market, is it not TIME for bears to do the same and rotate into sectors other than financials? 690568[/snapback] I think the posts weren't from a trading/current positions perspective. I think most people here had already covered by then (don't know about long though ). This is in fact a gift to bears looking to reshort. Bear market lows just like bull market highs always go further than you think they will, this will be true for finaglers as well. Link to comment Share on other sites More sharing options...
astral mike Posted September 19, 2008 Report Share Posted September 19, 2008 This is in fact a gift to bears looking to reshort. exactly, without shorts to squeeze in financials, it will prove harder to reverse downside market momentum. Link to comment Share on other sites More sharing options...
Charmin Posted September 19, 2008 Report Share Posted September 19, 2008 Goldbugs just had another WHODATHUNK with Dec. gold down to 826.5 from the high of 926. Just another $100 move in a day. Link to comment Share on other sites More sharing options...
Mothership Posted September 19, 2008 Report Share Posted September 19, 2008 The SPX December futures have just hit 1251.25. That's nearly 120 points in 18 hours ....... 6.66 points per hour. Link to comment Share on other sites More sharing options...
alceringa Posted September 19, 2008 Report Share Posted September 19, 2008 I guess they can always provide a shorting service as long as they hedge by being long the stock or by having a tailor made service with a bank (that eventually owns the stock) that hedges this out. I think Proshares short ETF's must be in the same situation. They only need to hedge out their net position as they also sell long and ultra long funds. BWTFDIK 690566[/snapback] With the Bucket Shops doing CFD's, that's not the way they do the hedging. (And Proshares isn't a Bucket Shop for its own ETF's, they are exchange traded.) The way the CFD Bucket Shops do it is by exaggerating the Bid/Ask in their own favour, especially when otherwise they are underwater on the trade. Simple for them to do, since there is no "mark to market". When you are trading CFD's with a bucket shop, it's just like gambling against the house. Link to comment Share on other sites More sharing options...
Olduvai Posted September 19, 2008 Report Share Posted September 19, 2008 Goldbugs just had another WHODATHUNK with Dec. gold down to 826.5 from the high of 926. Just another $100 move in a day. 690573[/snapback] the volatility in gold continues, now at $844, and crude oil back above $100, maybe for a moment, maybe for longer than that, maybe for the rest of my life? Link to comment Share on other sites More sharing options...
T_Slim Posted September 19, 2008 Report Share Posted September 19, 2008 "That's the thing. It's more than just news. They actually banned short selling in UK!!! They're looking to do the same here. I will tell you this, my trading will probably drop by 75% if they do this. There's NO way any trader can sit there waiting for a long position. I would short the brokers if they pass the no short selling rule. " I missed this news. I was referring to the nationalization of everything. This short selling garbage is straight up bull. I'll be shorting the brokers at will if it comes to that. Link to comment Share on other sites More sharing options...
alceringa Posted September 19, 2008 Report Share Posted September 19, 2008 For those that missed it............ The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies. Link to comment Share on other sites More sharing options...
Jetlag Posted September 19, 2008 Report Share Posted September 19, 2008 With the Bucket Shops doing CFD's, that's not the way they do the hedging. (And Proshares isn't a Bucket Shop for its own ETF's, they are exchange traded.) The way the CFD Bucket Shops do it is by exaggerating the Bid/Ask in their own favour, especially when otherwise they are underwater on the trade. Simple for them to do, since there is no "mark to market". When you are trading CFD's with a bucket shop, it's just like gambling against the house. 690575[/snapback] In a Casino there is a probability of losing in a slot machine that has a legal limit if I'm not mistaken, that is north of 80%, to put it simple. For that to work in CFDs investors on average would have to be losers by their own decisions. Are you sure they don't hedge anything at all? Link to comment Share on other sites More sharing options...
alceringa Posted September 19, 2008 Report Share Posted September 19, 2008 Here in Oz, Naked Shorting was perfectly legal until today when the local regulator stepped in to regulate against it and to also require reporting of "legitimate" short selling by some borkers, et al. The new rules are "temporary" until legislation can be passed to support the new rules. Link to comment Share on other sites More sharing options...
astral mike Posted September 19, 2008 Report Share Posted September 19, 2008 In a Casino there is a probability of losing in a slot machine that has a legal limit if I'm not mistaken, that is north of 80%, to put it simple. For that to work in CFDs investors on average would have to be losers by their own decisions. Are you sure they don't hedge anything at all? 690579[/snapback] I used to have a CFD account with City Index... untill my account was in profit by ?50K+ When i then started withdrawing my funds, they no longer wanted my buisness, and closed my account down. No different than a bookies. They don't like winners. Most spread-bet / CFD companies are licenced as bookies, and have no obligation to hedge. Link to comment Share on other sites More sharing options...
alceringa Posted September 19, 2008 Report Share Posted September 19, 2008 Remember, they are Bucket Shops. Think "Bookie". They hedge the same way Bookies do, by adjusting the "odds", ie "Bid/Ask", based upon how the punters are placing their "bets", ie, "order flow". Since the punters are continuously losing their nugget, the CFD Bucket shops have to continously advertise for more suckers/punters. Some of the punters will naturally, and by pure chance, make profits. Typically, the ones that make too much profits find that they have limitations placed on them, just like the card counters in blackjack/21. Link to comment Share on other sites More sharing options...
itiswhatitis Posted September 19, 2008 Report Share Posted September 19, 2008 For those that missed it............The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies. 690578[/snapback] Won't this send money pouring out of the treasury market making the govt financial situation that much more tenuous? Link to comment Share on other sites More sharing options...
Jetlag Posted September 19, 2008 Report Share Posted September 19, 2008 I used to have a CFD account with City Index... untill my account was in profit by ?50K+ When i then started withdrawing my funds, they no longer wanted my buisness, and closed my account down. No different than a bookies. They don't like winners. Most spread-bet / CFD companies are licenced as bookies, and have no obligation to hedge. 690581[/snapback] Wow, they only keep the losers Now I know why their based in the UK, it's only to take advantage of bookies legal base. Link to comment Share on other sites More sharing options...
Lemur Posted September 19, 2008 Report Share Posted September 19, 2008 Wow, they only keep the losers Now I know why their based in the UK, it's only to take advantage of bookies legal base. 690584[/snapback] Try IG markets. Much lower commissions than City index and I have not heard of them eliminating people. Link to comment Share on other sites More sharing options...
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