Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Anthony@Pacific who wrote (37612)	6/3/1999 12:20:00 AM
From: Colin Cody	Read Replies (1) of 122087

Anthony, Agreed, but as I said - generally U.S.A. retail accounts CAN NOT short IPO stocks during the first 30 days. Not until there is the general migration from type 1 cash accounts into type 2 accounts - which starts happening quickly after the 30 days are past. Retail accounts (investors/traders) are not Market Makers who short stocks and then usually cover A.S.A.P. in order to create and maintain an orderly market. Market Makers generally do not "take volume positions" by shorting IPO stocks per se. Why tie up their capital? They make money on churning and churning the VOLUME. I am not certain, but I BELIEVE that it is a rule violation for a MM to actually take a short position in an IPO stock in those first 30 days. I believe there's another MM rule prohibiting naked short selling with type 1 stocks as well (unless they get a specific hypothication agreement from the shareholder). I am not a MM, so I am not really clear on these MM rules. Rule 15c2-1 comes to mind as the Title 17 section I am thinking of. Colin

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