Uptick rule

RECENT NEWS
Benzinga  Feb 1  Comment 
President Donald Trump may be looking to meddle with market forces by reinstating the uptick rule, which prior to 2007 restricted short selling while a stock is falling. A recent tweet from the West Wing Reports Twitter Inc (NYSE: TWTR) account...
Benzinga  Jul 15  Comment 
Shares of ZIOPHARM Oncology Inc. (NASDAQ: ZIOP) sold off hard Thursday afternoon after The Street's Adam Feuerstein tweeted that a funding attempt had been abandoned, and brain cancer patient had died after receiving an injection of the company's...
Mondo Visione  Sep 18  Comment 
Taiwan Stock Exchange (TWSE) welcomes recently announced measures by the Financial Supervisory Commission (FSC) to stimulate trading activity. Starting from 23 September, around 1,200 borrowed stocks currently eligible for margin trading will be...
TheStreet.com  May 8  Comment 
As time and price marches on the third anniversary of the Flash Crash went by, ah, in a flash! Supposedly nobody who is empowered to have done the forensic accounting of that fiasco is remotely aware of what caused that infamous stock market...
Reuters  Jan 23  Comment 
The head of Man Group, the world's biggest listed hedge fund manager, is backing the reintroduction of the so-called 'uptick rule' to reduce the risk of a market crash prompted by lightning-fast computer traders.
Wall Street Journal  Sep 21  Comment 
Financial firms are wishing they had more time to prepare their trading systems for a new restriction on short selling that will hit the market in seven weeks.
TheStreet.com  May 11  Comment 
NEW YORK (TheStreet) -- Teddy Weisberg of Seaport Securities says the flash crash could have been avoided if the short sale uptick rule had never been stopped.
Bloomberg  May 5  Comment 
James “Jimmy” Cayne, the former chief executive officer of Bear Stearns Cos., said he suspects something “untoward” happened that led to the company’s collapse in March 2008.




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The uptick rule was a rule imposed by the Securities and Exchange Commission (SEC) that prevented short sellers to short a stock at a price lower than the last trading price. It was adopted in 1938 and eliminated on July 7, 2007.[1]

The rule stated that every short sale must take place at an "uptick" -- i.e. the price at which the short seller sells the stock must either be above the immediate trading price, or at the last trading price if it were higher than the second last price. This rule made it mechanically impossible for short sellers to drive down stock price by putting in sale orders at progressively lower price.

References

  1. 17 CFR PARTS 240 and 242 from the SEC)
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