How will ASX ban on short selling affect trading?

cordelia · 21 September 2008

Whilst I understand the process of short selling....both naked and covered....I would like to know how this will effect the ordinary trader who takes or currently holds short positions through brokers such as Comsec, Westpac or IB...

This may seem like a silly question but when you go through a broker how do you know if your short is a covered or naked one? because you are not the one who arranges the "borrow"?

I don't sell short because I don't have a feel for it....so I don't know what is involved?

Will this mean that all short trades will be stopped.....what will be the repercussions for those with open positions? Will they have to close out their positions within a certain timeframe...

If someone can explain this it would be very helpful..

I know that short selling is a highly contentious issue right now but I am not seeking an opinion on the right or wrong of shorting just info on the above...

agro · 21 September 2008

Re: How will ASX ban on S Selling effect trading

don't know but wish they did it before i had sold my shares in fortescue

It's Snake Pliskin · 21 September 2008

Re: How will ASX ban on S Selling affect trading

Cordelia,

They are banning covered shorts too. Retails shorters are no threat.

I'll probably close my shorting account and shift dollars elsewhere as the liquidity is going to dry up. Lucky I have no shorts on at the moment.

I am interested what will happen to the market too. You beat me to posting this thread.

cordelia · 21 September 2008

Re: How will ASX ban on S Selling affect trading

It's Snake Pliskin said:
Cordelia,

They are banning covered shorts too. Retails shorters are no threat.

I'll probably close my shorting account and shift dollars elsewhere as the liquidity is going to dry up. Lucky I have no shorts on at the moment.

I am interested what will happen to the market too. You beat me to posting this thread.

By retail shorters I gather you mean accounts that you trade though Comsec for example....but where will Comsec borrow the stock from to supply its customers...Sorry if my sentence sounds wrong but I am confused...

So who is banned from short selling...I know it now includes covered as well as naked.....

It's Snake Pliskin · 21 September 2008

Re: How will ASX ban on S Selling affect trading

cordelia said:
By retail shorters I gather you mean accounts that you trade though Comsec for example....but where will Comsec borrow the stock from to supply its customers...Sorry if my sentence sounds wrong but I am confused...

So who is banned from short selling...I know it now includes covered as well as naked.....

Yes by retail I mean the average person's account with Comsec and Mac etc.
I don't know where they get the stock from. That is something I have trusted the system with - Re: covered shorts.

Ok so I have re-read the announcement and it states this:

covered short selling banned (subject to limited authorised market-maker exemption)

http://www.asic.gov.au/ASIC/asic.ns...ered short selling not permitted?opendocument

Does this affect Direct Market access providers such as E-trade and Macquarie?

Julia · 21 September 2008

Re: How will ASX ban on S Selling affect trading

It's Snake Pliskin said:
Y
I don't know where they get the stock from. That is something I have trusted the system with - Re: covered shorts.

I haven't followed all this in detail but one of the objections to short selling in general has come from representatives of the Super Funds whose retirement funds are being used for lending to short sellers.
I doubt that too many ordinary superfund investors have been asked if they are happy for their stocks to be used in this way.

njc.corp · 22 September 2008

my view is pretty basic-

they are going to stop people making money-

the word and correct me if i am wrong-

this banning is do what-stop prices going down?

is it-?

so does that mean prices will go up

typical country-lets do what the yanks are doing

to many changes in my eyes means to many rules and with too many rules means their;s more damaged to come

the damage as to come in order to start a trend cycle-

i dont have any shorts but their needs to be a different side-not just up-

Thanks

Nick--

Calliope · 22 September 2008

njc.corp said:
my view is pretty basic

basic After reading your post I have absolutely no idea what your view is.

mayk · 22 September 2008

Well the gap is massive, BHP up 12%. It is scary and possibly unsustainable. There is no downward pressure, only upward, which might creat the Mother of all bubbles.

nomore4s · 22 September 2008

lol, the only short I still have open is WOW, and I thought I'd get stopped out today but it's down about 4%

Aussiest · 22 September 2008

mayk said:
There is no downward pressure, only upward, which might creat the Mother of all bubbles.

Well, wouldn't you wait till the bubble burst, buy in and then sell during next rally? That's if it's within the 30 days. Who knows what will happen with the 30 days is up ???

jersey10 · 22 September 2008

Aussiest said:
Well, wouldn't you wait till the bubble burst, buy in and then sell during next rally? That's if it's within the 30 days. Who knows what will happen with the 30 days is up ???

4200 is what will happen

prawn_86 · 22 September 2008

We no longer have the same market conditions as what existed 1 week, year, decade ago.

How are people suppoesed to INVEST with things like this changing the market dynamic completely and other issues like the 30 day renewal hanging over the market.

Any investment made this month is a pure gamble IMO, as whats to say the goal posts wont be moved once again.

Efficient market my ass....

jersey10 · 22 September 2008

prawn_86 said:
We no longer have the same market conditions as what existed 1 week, year, decade ago.

How are people suppoesed to INVEST with things like this changing the market dynamic completely and other issues like the 30 day renewal hanging over the market.

Any investment made this month is a pure gamble IMO, as whats to say the goal posts wont be moved once again.

Efficient market my ass....

I totally agree. It's like the ref in the middle of a football game saying you can't pass backwards for the next 30 minutes. After that 30 minutes is up i'll reassess how i think the game is flowing and then make a new rule.

white_goodman · 22 September 2008

whats the odds the markets driven up the few days before the 30 day ban is up and we plunge the day its back into effect

njc.corp · 22 September 2008

Calliope said:
basic After reading your post I have absolutely no idea what your view is.

my view is this short selling rule is only making the problem worst in the long run-

i am glad i am not trading as others will see this is a new twist in the works-

maybe when things hits the fan u will understand my view-

as far i am concern we should see rallys all week?

because theirs been a lot of talk that shorters are causing this problem

so lets see how this plan's out-

i will be watching from the sidelines like a whimp with cash in hand-

for my sake its a bad time to trade-

Thanks

Nick--

njc.corp · 22 September 2008

prawn_86 said:
We no longer have the same market conditions as what existed 1 week, year, decade ago.

How are people suppoesed to INVEST with things like this changing the market dynamic completely and other issues like the 30 day renewal hanging over the market.

Any investment made this month is a pure gamble IMO, as whats to say the goal posts wont be moved once again.

Efficient market my ass....

prawn u might have it wrong because the media and gov reckon by injecting so much money in the market that consumer confidence will come back-

my question is how u suppose to restore confidence if a lot have lost a lot of money lately?

blame the shorters it's their fault-

Thanks

Nick--

nunthewiser · 22 September 2008

white_goodman said:
whats the odds the markets driven up the few days before the 30 day ban is up and we plunge the day its back into effect

personally think we due a plunge a bit sooner than that

nunthewiser · 22 September 2008

njc.corp said:
prawn u might have it wrong because the media and gov reckon by injecting so much money in the market that consumer confidence will come back-

my question is how u suppose to restore confidence if a lot have lost a lot of money lately?

blame the shorters it's their fault-

Thanks

Nick--

LOL u sounding like twiggy !!! how is it the shorters fault ? did they create the market downturn or merely profit from it ? blame the shorters for the credit bubble too ? how about realestate bubble ?? oh hang on i just burnt my egggs , bleedin shorters suck dont they

Greg71 · 22 September 2008

Blame it on the rain.

How will ASX ban on short selling affect trading?

cordelia

agro

It's Snake Pliskin

cordelia

It's Snake Pliskin

Julia

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njc.corp

Calliope

mayk

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white_goodman

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