Shorting stocks: Mechanical aspects Message Board

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Strategies & Market Trends : Shorting stocks: Mechanical aspects

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To: Dante Sinferno who wrote (79)	8/3/1998 1:39:00 PM
From: Docaz	of 172

Stan Weinstein's explanation to the uptick rule (author of several publications): The uptick rule grew out of the 1929 crash and it was implemented on the NYSE and American Stock Exchange to prevent so-called bear raids or rapid falling in price of a stock caused by short-sellers. Many investors find this rule without logic and suspect that this rule may be changed one day. That is also the reason that the rule was not implemented in all stock exchanges. Interestingly the opposite is not implemented for buying a stock on a downtick, which could prevent a too rapid rise in price of stock. This proves that there is a bias towards a bull market which of course can be very dangerous on the upside just like on the downside if the price of a stock grows to rapidly based only on buying pressure and then falls even faster if the pressure is not sustained. Docaz

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