[jasonraymondson]

http://money.cnn.com/2009/03/10/news/up ... 2009031016

SEC may take aim at short sellers again
The agency is considering reinstating the uptick rule, which prohibits shorts from selling when stocks are falling, in order to stem the bleeding in the markets.

[Cog]

From reading the article, under the uptick rule a short seller can not sell unless the price go up. Over what period of time and what amount are they talking about. What if the share goes up one cent. Is that enough to allow a short seller to sell?

[shady28]

This kind of garbage (cracking down on short sellers) has been repeatedly studied and found to have no value, and in fact it can detract from the stability of the market. Two things a short seller does - he sells X amount of shares, and buys X amount of shares. So, when a stock tanks and nobody is buying - short sellers are there buying the shares back up as the stock goes down. The net result is that short sellers tend to prevent a stock from becoming excessively overvalued (really overpriced stocks become a target for short sellers), and at the same time the short sellers are the only ones buying up shares when the price plummets so they provide a price floor and liquidity.

Short sellers usually lose money. Now that they've had one year out of the past 25 or so where they win, big money wants to change the rules of the game and use them as scapegoats.

This is just another red herring to appease the masses.