A short sale on the nasdfaq system, soes, snet is indicated with a SS designation versus a S designation..
ie...sell short 1000 abcd mkt. ss1000abcd mkt.
sell 1000 abcd mkt s 1000 acbd mkt
once you have this down, enter ANY price you want. You can enter a price on thebid, inbetween on the office, any limit, if at all you want.
The firm that executes the trade NOW probably has checks and ysstems that prevent it from being executed at prices that would violate uptick, upbid rules.
lets say a stock is 44 x 44 1/8 and 44 is a downtick/downbid...you senter an order to SS1000ABCD.44 .
Now clearly at this point it would violative to have the execution go off at 44. But if the MM firm that gets your order can find a client to buy at 44 1/8, they can fill you at 44 1/16., you getting a 1/16 better and they can make their 1/16. Clearly they would want this trade.
They arent "happy" about giving you the price improvement, but they MUST if theywant to close BOTH sides of the position.
What could happen is the FIRM could sell short the stock to the buyer at 44 1/8....wait for the bid to drop to 43 7/8 x 44 offered, printing at 7/8, NOW take your stock in at 44, makeing the full 1/8. Or the firm, if the stock moves higher, can quickly fill you at 1/16.
These mm's have the world's best position. They have client orders to work against. Moves lower, they make an 1/8...moves higher, they make a 1/16. Moves too quickly they represent you at 1/8 and lose nothing. Not bad.
Regards,
Steve@yamner.com |
