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davkell

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Monday, September 22, 2008 - 05:50 pm:

I haven't seen any discussions on this topic yet, which is surprising!

Can anyone tell me whether this ban on shorting is just actual shorting (borrowing stock, selling, and buying back at a lower price) or does it include going short on CFD's?

"Trade Your Way To Financial Freedom" - Van K Tharp

"Manage the downside; the upside will take care of itself" - Donald Trump

gohard

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Thursday, November 20, 2008 - 12:07 pm:

Copy of present interpretation of shorting according to E*trade

As you may be aware, most forms of short selling (including covered short sales) of securities quoted on ASX have been banned since 21 September 2008. That ban is to be partially lifted on 19 November 2008. In conjunction with the partial lifting of the ban, ASIC has imposed new disclosure obligations on clients who place sell orders.

The following information is provided for E*TRADE Australia clients concerning the partial lifting of the ban and the new disclosure obligations and how it affects your trading through the E*TRADE Australia system (System).

1. Long sales only will be permitted
Under the new rules, whenever you place a sell order with a broker, you must inform the broker if the sale is one of the following 3 categories: (1) long sale; (2) short sale; or (3) exempt covered short sale.

We will not set out in detail the differences between the categories of sale because, when trading through us, you will only be permitted to place orders which are long sale orders - that is sell orders for stock which we are able to confirm through the System at the time of you placing the order that you own. Our System's filters will block any sale orders where it is unable to confirm that you own the securities.
Important note: If you own the securities as a result of a securities borrowing/lending arrangement, the sale of those securities is not treated as a long sale, but as a short sale or potentially an exempt covered short sale. You are not permitted to submit such orders through our System.

In brief, the following categories of sales are to be classified as “long sales”:

* a sale of securities that you already own at the time you place the sale order with us. Your ownership must not have arisen because you have borrowed the securities from a securities lender (these are to be classified as short sales – see above).
* a sale of securities where you have executed a transaction to purchase the securities, but the purchase has not yet been settled; and
* a sale of securities where you have already exercised sufficient exchange traded call options in order to deliver the securities you wish to sell.

2. How you satisfy your disclosure obligation
You have the obligation to inform us that the sale is a long sale. By entering a sell order through our System, you will be taken to have informed us that the sale is a long sale – that is that it meets the requirements of paragraph 1. As noted above, no other orders will be accepted by the System. When placing a sell order by telephone, our representative will ask you to confirm that the sale is a long sale.

3. Amendments to our terms and conditions
In the light of the new rules, our Terms and Conditions will be amended to include the following additional obligations:

1. You will only place an order to sell financial products through our System where at the time you have a presently exercisable and unconditional right to vest the products in the buyer, otherwise than because of a securities lending arrangement (a long sale).
2. Each time you place a sale order with us through the System, you will be taken to have represented to us that the sale is a long sale.
3. Each time you place a sell order by telephone, you must acknowledge that the sale is a long sale.
4. You indemnify us for any loss suffered as a result of a breach of your obligations in paragraph (a) or any representation taken to have been made by you in paragraph (b) being untrue.

You will be advised of when the full text of these additional terms are available. Please do not hesitate to contact us on
1300 658 355 (8am – 8pm Monday to Friday) if you have any queries concerning any of the above.

morton

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Friday, November 21, 2008 - 01:35 pm:

this shorting ban is the biggest croc I ever saw. Case in point - no support at 3500..

what next? ban panic selling?

ohkoolnutz

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Friday, November 21, 2008 - 01:47 pm:

Banning of shorts was never meant to create a bull market. It was meant to stop the increased volatility caused by shorts extending the momentum in the swing movements.

I doubt the Australian government even understood this when they implemented the ban. They just implement what their colleagues do overseas because they are in over their heads.

---
ohk

Lies, Damn Lies and Technical Analysis

tryhay

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Friday, November 21, 2008 - 07:24 pm:

Hi Guys,

morton wrote on Friday, November 21, 2008 - 02:35 pm:
what next? ban panic selling?

If they could I'm sure they would... I guess this matter is one of do as I say not what I do ~ as shown below.......

Funnily enough there is no problem still shorting XJO and Banks using Warrants Options, and other Structured Products ~ go figure.......

Advice from UBS on short selling ban <https://wm-au.ibb.ubs.com/pca/download/important_notice_sale_of_securities.pdf>

The Australian Securities & Investments Commission (ASIC) have requested trading participants to inform all clients that effective 19 November 2008:
• covered short sales of approved non-financial securities will be permitted;
• the ban on covered short selling of financial securities (being those comprising the S&P/ASX 200 financials
and five additional APRA regulated securities) will continue until 27 January 2009; and
• additional disclosure and reporting requirements will be imposed on trading participants and their clients
for permitted covered short sales.

* Please be aware that you can only short sell securities through UBS if you have an existing approved short selling
account with us.

* For the avoidance of doubt, we understand that ASX will maintain its ban on “naked” short sales indefinitely.

looking for a retest of failed support of XJO SPX etc (now resistance) some time next week (options expiration EOW in US?)

Cheers

FWIW I see Louise Yamada just predict S&P to break down to 600 target < http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vDlq_wyqEv_Q.asf >

(Message edited by tryhay on November 21, 2008)

Happy trading DYOR

morton

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Friday, November 21, 2008 - 09:24 pm:

yeah right, ETO's lack any volume to be effective...

cuznkate

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Thursday, December 11, 2008 - 10:53 pm:

Have been toying with the idea of trying to get the ASX reported short sell volumes into a metastock data base to try to chart the activities of short sellers.

Personally, I have nothing against short selling as such. I do however have an issue with funds or whatever they are called - lets say the big end of town with deep pockets ganging up and dumping so many shares on the buyers that sooner or later they exhaust the buyers and down the price goes.

From where I sit it is hard to imagine retail level short seller making any real difference to price action - but I can see how getting a few groups with deep pockets together can make prices crash and I think it goes on all the time.

No use getting cross with them or fighting them - you will just come out hurt but it seems quite worthwhile to hang onto thir coat tails and follow them (or at least exit your long position if you identify them early enough)

I have looked at the reported short sales list put out by ASX (and usually check it to try to keep an eye on the shorters at least with stox I am long in.

BKN for example had a recent and significant increase in short seller activity - indeed on one day (a couple of days back HALF the stock traded was short sells)

Is just too hard to wade thru the many shortable stox and try to figure out what is happening but surely, if one could somehow create a data base of shortable stox and flick thru it regularly, one could surely pick up and early trend and either exit the stock or perhaps even grab hold of the coat tails of the big end when they attack a stock and ride with them

I am not very computer literate whenit comes to getting the data from the ASX web site https://www.asxonline.com/intradoc-cgi/i...&SortOrder=Desc
into a useable data base

Before I go hammering away more than I have, I think it reasonable to ask if anyone else has tried it. If you have and are doing it successfully and dont want to share it I can understand that but if you have got some way along the road but are stummped then maybe a combined effort could come up with a useful means of charting the activity of shorters

Anyone thought about it

ALWAYS bite off more than you can chew.....THEN CHEW LIKE HELL

ohkoolnutz

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Friday, December 12, 2008 - 08:28 am:

cuznkate wrote on Thursday, December 11, 2008 - 11:53 pm:
Personally, I have nothing against short selling as such. I do however have an issue with funds or whatever they are called - lets say the big end of town with deep pockets ganging up and dumping so many shares on the buyers that sooner or later they exhaust the buyers and down the price goes.

That is the whole point. It's also the basis of my belief that we could wake up one day and see everybody's retirement funds go to zero because it was tradition to lemming all retirement savings into the stock market. A handful of people would choreograph the takedown of the system using a tsunami-type approach.

That is why I don't salary-sacrifice into superannuation. I forego tax savings but save outside this "locked box with 40 year timer" which is being manipulated by politicians, fund managers and traders simultaneously.

Short-selling of any type is a disadvantage of public companies and shareholders because it leaves open the possibility of a black swan event.

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ohk

Lies, Damn Lies and Technical Analysis

morton

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Friday, December 12, 2008 - 09:04 am:

Shorters can not crash the market, there is an uptick rule. Also when the shorters cover, they create buying support which makes prices rise...

ohkoolnutz

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Saturday, December 13, 2008 - 06:52 am:

The uptick rule was eliminated in July 2007 in US markets.

The whole point of short raids is to send the company bankrupt and remove the need to cover. How does selling short at $100 and covering at $10 provide "support"? I don't consider a move from $100 to $10 a rise in price.

(Message edited by ohkoolnutz on December 13, 2008)

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ohk

Lies, Damn Lies and Technical Analysis

morton

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Saturday, December 13, 2008 - 10:07 am:

This topic is ASX shorting bans, the uptick rule existed on the ASX.

Price will always be the market leader, shorting is but a vehicle for making money...

You obviously dont understand the value of volume, if one has the volume to crash a stock to $10, they must have bought most of the stock, to who does one sell this all stock, and I'd love to buy a $100 stock at $10.

ohkoolnutz

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Sunday, December 14, 2008 - 08:28 am:

You obviously don't understand the amount of money some players have to manipulate markets, time their moves to expose weaknesses in practical implementations of economic and price principles and control the action.

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ohk

Lies, Damn Lies and Technical Analysis

cuznkate

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Sunday, December 14, 2008 - 02:31 pm:

The up tick rule does not apply to CFD's but more importantly, what mechanisms and double checks exist to prevent short sellers dumping "at market"....I bet none - they use their favourite broker who does thier bidding

ALWAYS bite off more than you can chew.....THEN CHEW LIKE HELL

morton

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Tuesday, December 16, 2008 - 01:03 pm:

Manipulating markets belong in the world of fairies and elves. They're probably the same people who profit take, sell at the top, and buy at the bottom.

ASX:CTY:-Country Road, is a very low volume stock, relatively this makes you a major trader, (assuming you have a few hundred g's) if you have the know how, please move the price for me AND make a good profit. I'll be watching...Extra points for forcasting future price levels.

ohkoolnutz

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Wednesday, January 07, 2009 - 08:15 am:

There was a giant short-squeeze in VW shares in November 2008. Due to Porsche surprisingly declaring that it owned options to buy virtually all of VW shares the shortsellers covered at skyrocketing prices since no tradeable shares existed on the open market.

A good outcome as we now see is that we have one less shortseller on this planet.

http://www.nytimes.com/2009/01/07/business/worldbusiness/07merckle.html

(Message edited by ohkoolnutz on January 07, 2009)

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ohk

Lies, Damn Lies and Technical Analysis

morton

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Wednesday, January 07, 2009 - 10:03 am:

I learnt a new word today, syllogism, for example, all cats die, socrates died, therefore socrates is a cat...

therefore, fundamentals cause prices to fall, shorters can profits from falls, therefore all shorters cause prices to fall.

If anything, this story proves shorters do not control markets. The guy made a bad investment...

ohkoolnutz

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Wednesday, January 07, 2009 - 02:22 pm:

It proves the guy with the bigger purse or stronger position controls the markets. Since Porsche owned 95% of the stock there was nowhere to go but up. In another case shortsellers might borrow and dump 50% of outstanding shares of a stock into the market and there is nowhere to go but down.

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ohk

Lies, Damn Lies and Technical Analysis

ohkoolnutz

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Thursday, January 22, 2009 - 07:10 am:

http://business.smh.com.au/business/regulator-extends-shortselling-ban-20090121- 7moy.html

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ohk

Lies, Damn Lies and Technical Analysis

morton

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Thursday, January 22, 2009 - 07:35 pm:

ok, here's the proof. The vertical line is the date shorting was banned. Both channels are linear regressions with bands at two std dev. (Chart from high of 2007 to today)

You dont need me to show you that banning shorting has caused the market to fall faster.

I'd like to re-iterate, fundamentals make markets fall, not shorters.

xjo

ohkoolnutz

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Friday, January 23, 2009 - 07:36 am:

Too bad I can't post proof of the fact that it would have fallen faster if shorting had not been banned.

I like your attempt though. I'd love to revisit this when they eventually lift the ban entirely and see how the market has fared a year afterwards. If there was a large consolidation upcoming over the next 12 months your channel (the steep one from September onwards) would change since new data changes the impact of previous data on the overall trend.

I don't believe in fundamentals. 100 years ago this may have been true but stocks are more a gamble than an investment these days. The whole market is rigged and shorters are just one part of it. If fundamentals ruled then the market would have never risen to the sky high levels it was at.