Comments on: Uptight on Uptick

By: alephblog » Blog Archive » One Dozen Notes on Our Manic Capital Markets

Tue, 29 Jun 2010 00:39:12 +0000

[...] I am not a believer in the shorts being able to manipulate the markets as much as some would say. It’s easier to manipulate on the long side. Here is a good post at [...]

By: David Merkel

David Merkel — Mon, 07 Apr 2008 14:06:15 +0000

I was a programmer as an actuary… this is not a hard problem. Most IT professionals are wired to say, “That can’t be done,” and non-IT bosses roll over.

I understand that real time is not possible, but every broker has a list of loanable shares at the end of each day. It would be trivial to pool those lists and publish them before the next session opens.

By: BriG

BriG — Mon, 07 Apr 2008 02:13:12 +0000

“The thing is the uptick rule is not the real problem. The real problem is that shorts don’t have to get a positive locate at the time of the shorting”

“There is no reason why there can’t be real-time data on loanable shares.”

“There needs to be stricter rules/penalties on what happens when a party fails to deliver a security. As it is, when the cost of failing to deliver is miniscule, it can really bollix up the markets”

Thank you.

This is the real issue that no one seems to mention

My opinion the uptick rule is needed because the SEC is unwilling to enforce its other rules.

By: JY

JY — Sun, 06 Apr 2008 15:41:13 +0000

“This is a computerized era. There is no reason why there can’t be real-time data on loanable shares.”

This is much much much harder than what people without a technology background tend to think. There are too many moving parts in the financial system to coordinate. The cost of coordinating n agents typically scales n^2, hence this is not a tractable problem unless you slow down trading to a crawl or limit the number of market participants. The best way to deal with the problem is still trust that people are doing the right thing, but issue a stiff penalty when they’re caught.