posted on Oct, 2 2008 @ 12:43 PM
So the bailout is supposed to pull this market out of a rut, if you've been watching the markets there were some very gloomy days (today has been
another at almost 300 down on the Dow. The thing is the short sellers haven't even been playing. What do you think will happen to the market
tomorrow when the Shorts are back in play.
For any who don't know what a short is, here is an example - You make money by betting the stock will go down.
Sell 100 ABC Shares at 100 ($1000.00 gets deposited to your account)
ABC shares drop to $50 you buy 100 shares ($500 gets withdrawn from your account)
You made a profit of $500 betting the stock would go down.
IMPORTANT UPDATED INFORMATION: Due to a recent Securities & Exchange Commission (SEC) Order, short selling on certain financial securities is not
permitted from September 19, 2008 through October 2, 2008. This order went into effect on September 19, 2008 and was amended to include additional
securities on September 21, 2008. The complete list of stocks which are unavailable for short selling can be found here (the "subject securities").
In conjunction with this order, any existing open orders to sell short these securities have been or will be cancelled.
REVISED: New Information for Options Customers: Due to the above SEC Order on short sales, opening new positions on "uncovered calls" in the subject
securities will be permitted pursuant to the September 21, 2008 amendment which provides an exception for the creation of call options; provided,
however, that only short sales as a result of assignment following exercise by the holder of the call will be permitted. Please note that exercising
"long puts" on the subject securities is not permitted since an exercise of a long put would result in a short sale position. E*TRADE Securities
reserves the right to close-out any uncovered options position that would result in a violation of this SEC order at any time at its discretion. Any
adverse financial consequence of this transaction will be the full responsibility of the customer.
Again, please note that the above circumstances are a direct result of the above described SEC Order on short sales.