This is the SEC rule. Short Sale Circuit Breaker
The SEC adopted amendments to Regulation SHO with a compliance date of November 10, 2010. Among the rule changes, the SEC introduced Rule 201 (Alternative Uptick Rule), a short sale-related circuit breaker that when triggered, will impose a restriction on prices at which securities may be sold short. The SEC also issued guidance for broker-dealers wishing to mark certain qualifying orders 201cshort exempt.201d For more details, refer to Amendments to Regulation SHO (Release 34-61595).
MNKD short sale circuit breaker was activated, tomorrow no brokers can short MNKD.
No selling shares short below the previous trade price. They can slow the rise, but the can't push it down until Tuesday. I expect it will be back on the REG SHO list by then from Friday's naked short/ bear (bare) raid. There may not be any significant short pressure for a while. That doesn't mean the insane won't cost average up, but their interest rate on the shares borrowed is about to get a lot higher.
I found this on Wikipedia...for what its worth. "For the rule to be satisfied, the short must be either at a price above the last traded price of the security, or at the last traded price if that price was higher than the price in the previous trade." I won't pretend to fully understand this however. But it seems like they could still ride it down by having another trading partner bounce some shares around at a lower and lower price..basically losing money on some shares, but making up for it in their short positions. This sound right?
An uptick rule means that when the trader sells the borrowed stock, he must do so at a higher price than the last transaction on the same market for the same stock. The "tick" is the smallest unit of variation in a price allowable on the market (for example, 1 cent). This means the short selling must be up one tick on the previous trade, hence uptick.
This is somewhat old news as it went into effect on friday after the halt. No shares will be available to short until Tuesday. The reason for the second drop was 100% sure longs selling after seeing the first dive (panic). Scooped shares up on the second dive.....I can confirm the short sale circuit breaker in effect though, until Tuesday.
before you unload god knows what in your pants, this went into effect at 3:28 on friday the 27th when it had crashed from $11.10 to $9.51.
at 3:45 it was down to $8.69
obviously this did not stop any shorting, they dragged it behind the truck on a chain down a dirt road.
it this stopped shorting please explain why it was shorted toholyhellandback almost 15 minutes later.
i believe that was a 5 min halt or something like that i have read.
explain if you actually understand it. otherwise do not post misinformation that is important.
thank you sir.
I thought of that as well, and wondered how this might affect stock manipulation on Monday. Obviously there are other tricks up their (shorts) sleeves to try to run this down, but surely they can't do nearly as much with the uptick rule in effect.....can they? Anyone on here more knowledgeable about this?
This looks legit, and they are on the list. But can someone with better understanding than explain exactly what it means, because in the summary on the site it just says that it "will impose restrictions on prices at which securities may be sold short." So will there be zero shorting allowed tomorrow or will it be allowed again once it hits a certain price?
If one googles Regulation SHO Release 34-61595 , you will find the above wording in the .pdf file in the 3rd link from Shearman and Sterling. The input from luvmeplezz appears to be valid to me.
Bottom line what does this uptic rule mean and how will it affect us, does this mean that shorts will not be able to short this stock tomorrow, and how long will it last.
Sentiment: Strong Buy