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UpTick Rule Explained: An End to Dead America Profits March 10, 2009

Posted by aetiusromulous in news, politics, Video, YouTube.
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No More Betting Against the House

Crafty Wall Streeter’s can get you coming and going. In a falling market, traders can make money on the collapse of a stock, principally through “shorting”, which means borrowing stock at a high price and waiting for it to fall, buying it low and returning the stock, keeping the “spread” in between. I know what you’re thinking, and I wouldn’t lend them anything either at this point – but that’s another story.

In essence, this means that in a crash like the one we are in, there is a lot of money to be made by continuing the crash, and very little by stopping it. The “UpTick Rule” was a rule removed by the Bush Administration that made it harder to “chase the market down”. The rule prevents traders from shorting a stock unless its previous trade had been an “up tick”, or in other words, the stock was rising. This takes all the fun out of making millions while the earth melts away.

The Obama administration will simply re-instate this silly little inconvenience later this month. We can expect another well-rehearsed tirade from Rick Santilli no doubt. Meanwhile, watch Jim Cramer explain this stuff better than I can.

Main Site Link: ScreamBucket.com


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