Uptick Rule

[Salty Gibbon]

I am ok with the uptick rule for shorting stocks but could someone please explain to me the reasoning and logic behind it.

 

[Trader333]

There is no real logic behind this other than an attempt to prevent a stock being shorted by everyone all at once. You will also find that there is a limit to how much of a stock can be shorted and when there is a momentum drop in certain stocks then getting a short trade on is sometimes impossible.


Paul

 

[Mr. Charts]

Salty,
The rule was introduced as a result of ignorant political congressional pressure. There are always people who think shorting is somehow "un-American" and damaging to US business and even if politicos can grasp how markets work, their constituents and business supporters rarely can.
Message in your box.
Best wishes,
Richard