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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (8170)	5/2/1998 12:48:00 PM
From: Mama Bear	Read Replies (3) \| Respond to of 18691

Roger, if you take a little time to visit the Datek thread you'll find you weren't the only one with problems between 9:30 and 10am in the past week or so. I placed an order to short MARG at 15 one morning and it just sat there, despite the fact that the bid was 15 for a full 2 minutes and many thousands of shares, and that MARG is Nasdaq small cap with no uptick consideration. They are also very unresponsive when it comes to situations like you encountered, I have never heard of anyone being compensated with more than a few free trades. I know that you are motivated fellow, so if you find a way to get through their denial of responsibility, please share. I put in an order to short NSCP at 23 1/2 with the uptick bid at 23 1/2. Evidently, the bid fell to 23 7/16 just before the trade was executed at 23 1/2. This should have been a legal short according to my understanding of the Nasdaq uptick rule: >>>According to a NASD Notice to Members about the 'Legal Definition Of Short Sale' ( nasdr.com ) the IM-3350 Short Sale rule says: [...]The Association has determined that in order to effect a "legal" short sale when the current best bid is lower than the preceding best bid the short sale must be executed at a price of at least 1/16th point above the current inside bid [when the current inside spread is 1/16th point or greater]. The last sale report for such a trade would, therefore, be above the inside bid by at least 1/16th of a point. [If the current spread is less than 1/16th of a point, however, the short sale must be executed at a price equal to or greater than the current inside offer price.]<<< Naturally, NSCP promptly proceeded to fall below 23 (this was just a daytrade).I spent half an hour on the phone with 3 men who were presumably licensed series 7 brokers who insisted that the ask had to be on an uptick according to Nasdaq rules. They also disclaimed responsibility saying that "Nasdaq" had killed the trade, not Datek (the trade was killed in less than 30 seconds). It represented perhaps $375 to $500 in "lost" profit, and left a bad taste in my mouth. I was going to leave Datek over this and move my business to MB Trading, however, when I received their account package they were kind enough to include their "hard to borrow" list (as of 4/23/98). It seemed every other name on the list was on my watchlist (PNDA,ENML,MARG,KTEL,ZONA,AMZN,CFON,GUMM,HMSC,KRY,SIEB to name a few). Since I make the bulk of my trading profits shorting those names, I guess I'm stuck with Datek. I do wonder how Datek finds shares of these stocks when no one else seems to be able to do so. Barb