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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Dominick who wrote (15589)	12/15/2002 4:19:22 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 19219

What I'm not clear on is can a MM short more than the float? How could he justify covering 50 million shares if there's only 5 million? The NASD Manual makes a clear distinction between what it calls "bona fide Market Making" activity and net positions held in Market Making accounts. While MMs are exempt from Short Selling Rules while making markets, they are not exempt from the general requirements for accumulated positions. An obvious excess of short positions beyond what is needed for bona fide Market Making should raise a flag with NASD that the exemptions are being abused. There are also exemptions for members holding hedged positions, usually involving offsetting options positions. You can form your own opinion about how well NASD polices their membership. If you want to see first hand what NASD has to say about all of this you can download the manual in .PDF format or read the online version at nasdr.com Click on NASD Manual to gain entry to either the online text or the .PDF file. The .PDF is searchable; in particular look for "short sale" and "Affirmative Determination"