So the European Union's 27-nation bloc is setting new rules for short selling and derivatives trading. The European Commission set up the European Securities and Market Authority to police European markets.

Michel Barnier, European Union commissioner in charge of reform said: "Today we are proposing rules -- so we know who is doing what and who owes what to who."

Continue reading European Union Sets New Short Selling and Derivatives Curbs

European Union Sets New Short Selling and Derivatives Curbs originally appeared on BloggingStocks on Wed, 15 Sep 2010 12:00:00 EST. Please see our terms for use of feeds.

Bearish traders should be using the recent strength in the equity markets to identify short opportunities. The S&P 500 is currently trading above 1,100 and has rallied very sharply off of the 1,040-1,050 level in just a matter of days.

This surge in equities appears to be driven by a combination of short covering and better than expected economic numbers. Rather than getting bullish here, however, it may be time to put out some tactical shorts. Traders that have been buying the highs and selling the lows in anticipation of a breakout of the current trading range have been consistently burned.

Continue reading Coinstar Could Be a Short Candidate

Coinstar Could Be a Short Candidate originally appeared on BloggingStocks on Fri, 03 Sep 2010 16:30:00 EST. Please see our terms for use of feeds.

Short sellers increased their bets against tech stocks for the period ending May 28, according to data from the NYSE and NASDAQ.

The short interest in NYSE-traded tech shares AMD (AMD) and Texas Instruments (TXN) were up sharply. The short interest in AMD was up 19% to 61.6 million shares. Share short in TXN rose 27% to 27.9 million.

Among NASDAQ-traded stocks, the short interest in Intel (INTC) rose 36% to 61.3 million. Shares short in Broadcom (BRCM) were up 41% to 15.9 million. The short interest in Qualcomm (QCOM), Micron (MU), and Seagate (STX) also rose.

Tech shares with falling short interest included Microsoft (MSFT), down 14% to 57 million and Dell (DELL) down 14% to 45.3 million.

Short Sellers Up Bets Against Tech originally appeared on BloggingStocks on Thu, 10 Jun 2010 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Germany Wants Wider Ban on Naked Short Selling

Germany Wants Wider Ban on Naked Short Selling originally appeared on BloggingStocks on Tue, 25 May 2010 18:30:00 EST. Please see our terms for use of feeds.

At long last some details of short trades by Goldman Sachs (GS) are coming to light. During the height of the crisis, Goldman netted $50 million in one day shorting the market, or betting against the mortgage market.

It probably was the intensified short selling, not only by Goldman but by other large banks, that drove prices down so fast and so hard. When all the investigations are completed on the other big banks, we'll probably find the real, behind-the-scenes trading strategies that brought us to our knees.

Continue reading Goldman Nets $50 Million in One Day Shorting the Market During the Financial Crisis

Goldman Nets $50 Million in One Day Shorting the Market During the Financial Crisis originally appeared on BloggingStocks on Sat, 24 Apr 2010 14:10:00 EST. Please see our terms for use of feeds.

Remember just a few short months ago when the financial markets were in a tailspin? Day after day, selling came in to the market. Short selling accelerated. Then came "naked short selling." The markets ended up being chaotic and the government had to step in. With frantic short selling going on, the SEC banned naked short sales of a few select banks for a few days.

Now we fast forward to Europe. The same scenario is being played out against the euro. Hedge funds have increased their short positions. Traders are buying credit default swaps (CDSs) supposedly as protection against a Greek default. But very much like the U.S. meltdown, traders are also buying naked CDSs. Traders holding naked CDSs do not have an underlying position that they are hedging.

Continue reading Hedge Funds Raise Their Short Positions Against the Euro

Hedge Funds Raise Their Short Positions Against the Euro originally appeared on BloggingStocks on Wed, 03 Mar 2010 12:00:00 EST. Please see our terms for use of feeds.

China wants to join the international trading club. Regulators approved "in principle" the trading tools of stock index futures, short selling and margin trading. These trading practices have long been used in London, New York and most international trading exchanges.

It will take about three months for the new changes to take effect. Meanwhile,stocks of major Chinese brokerage houses were bid higher in anticipation that they will be making margin loans to investors.

Continue reading Chinese Regulator to Approve Stock Trading Tools for Chinese Stocks

Chinese Regulator to Approve Stock Trading Tools for Chinese Stocks originally appeared on BloggingStocks on Fri, 08 Jan 2010 16:30:00 EST. Please see our terms for use of feeds.

Two key elements of the market's rise -- short-sellers covering their positions and money managers looking for quick profits -- are waning, reducing buy-side volume.

This will eventually impair the market's ability to sustain itself as more shorts are entering the market and more managers are preparing to bank profits before the end of their year on Nov. 1.

Next: Sign #10: An eerie similarity

Sign #9: Short covering and money managers looking to bank profits originally appeared on BloggingStocks on Sun, 20 Sep 2009 12:00:00 EST. Please see our terms for use of feeds.

Continue reading SEC says short-selling not responsible for stock market tumble

SEC says short-selling not responsible for stock market tumble originally appeared on BloggingStocks on Tue, 15 Sep 2009 17:20:00 EST. Please see our terms for use of feeds.

Continue reading Biovail's short selling lawsuit dismissed

Biovail's short selling lawsuit dismissed originally appeared on BloggingStocks on Mon, 24 Aug 2009 15:30:00 EST. Please see our terms for use of feeds.

Investor and trader Mishko Janusevich, he of decent-sized net worth fame, had a mantra that he used to repeat while outlining the top, new stock shorts that appeared that day, as determined by technical indicators.

He would stand next to the overhead projected stock chart at the front of the trading room, point to the stock chart and recite, "You see this stock? You see that it's dropped $8 in past two days? You think it can't drop any more? SELL THAT STOCK, it's dropping more!!"

Continue reading Short City: Radio Shack

Short City: Radio Shack originally appeared on BloggingStocks on Tue, 04 Aug 2009 18:30:00 EST. Please see our terms for use of feeds.

Has your broker repeatedly sold you on the "safe" investment vehicle, the mutual fund? Investing in a wide variety of prominent companies, with solid, long-term track records, mutual funds have been an easy-to-understand and popular investment choice for decades.

Mutual funds are hugely diversified, holding large stakes in recognizable names such as Google (NASDAQ: GOOG), Citigroup (NYSE: C), Walmart (NYSE: WMT), Starbucks (NASDAQ: SBUX), General Electric (NYSE: GE), Bank of America (NYSE: BAC), and Fannie Mae (NYSE: FNM).

Continue reading How do hedge funds differ from mutual funds?

How do hedge funds differ from mutual funds? originally appeared on BloggingStocks on Fri, 12 Jun 2009 13:00:00 EST. Please see our terms for use of feeds.

I'm going to write something here that probably flies in the face of what most people are thinking but here it is: Who the heck cares what most people think about the uptick rule? Seriously. Of course most investors are going to oppose anything that makes it easier for stock prices to fall but the role of the SEC is to maintain a fair and orderly stock market -- not to appease the short-term oriented desires of people who want to look at their portfolio statements and see black.

Continue reading Of course investors support the return of the uptick rule! Who cares?

Of course investors support the return of the uptick rule! Who cares? originally appeared on BloggingStocks on Wed, 10 Jun 2009 14:00:00 EST. Please see our terms for use of feeds.

Options and trading specialist Bernie Schaeffer selects stocks based on a combination of fundamental, technical and sentiment-based metrics.

His research leads to long trading positions for his Schaeffer's Master Portfolio and short trading plays for his Schaeffer's Short Selling services.

Here's a long at four of his latest trading ideas -- long positions in Netflix (NASDAQ: NFLX) and VMware (NYSE: VMW) as well as short position in Exxon Mobil (NYSE: XOM) and Apple (NASDAQ: AAPL).

Continue reading The long & short of Bernie Schaeffer's trades

The long & short of Bernie Schaeffer's trades originally appeared on BloggingStocks on Fri, 05 Jun 2009 11:00:00 EST. Please see our terms for use of feeds.

Continue reading SEC chief says crackdown on short-selling is a priority

SEC chief says crackdown on short-selling is a priority originally appeared on BloggingStocks on Wed, 06 May 2009 10:50:00 EST. Please see our terms for use of feeds.

• Short selling in Citigroup (NYSE C) is up six fold since February 27
• Short sales for Bank of America Corp (NYSE BAC), Met Life (NYSE MET) and Amercian Express Co (NYSE AXP) are up 40%
• Short sales for 18 banks are twice as high on April 15 as they were at their peak last year in July

You are probably asking why is this happening? Overall, investors are seeing that the process of "stress tests" is not being managed well. When there is uncertainty, investors prefer the short side to protect their other long positions.

Continue reading Why are traders short selling bank stocks?

Why are traders short selling bank stocks? originally appeared on BloggingStocks on Mon, 04 May 2009 14:30:00 EST. Please see our terms for use of feeds.

"BJ's recognizes the diverse financial status and changing needs of its members," commented president and CEO Laura Sen in a statement. "We are proud to help members stretch their food budgets by offering savings on a large selection of fresh fruits, vegetables, meats and baked goods, along with name-brand, non-perishable staples."

Continue reading Sign of the times: BJ's Wholesale Club now accepting food stamps

Sign of the times: BJ's Wholesale Club now accepting food stamps originally appeared on BloggingStocks on Tue, 14 Apr 2009 15:00:00 EST. Please see our terms for use of feeds.

So what exactly was happening? First of all, in order to sell short (sell something you don't have) you must first borrow it from someone else. Usually there are willing lenders at large brokerage houses. What you are trying to do is to sell the stock first and replace it a lower price later on (that is if the market goes your way -- down).

Last year we saw traders selling short without first borrowing the stock. Then, when the buy trade to replace it was executed, there was no stock to deliver. Remember, they were supposed to borrow it first. This is called a "fail to deliver" trade. Former SEC commissioner Roel Campos wrote a letter and posted it on the SEC's website saying: "these companies are instead targets of illegal and manipulative trading with intentional failures to deliver used by traders to extract profits as the share price plummets."

Continue reading Short selling madness is sanctioned by the SEC

Short selling madness is sanctioned by the SEC originally appeared on BloggingStocks on Tue, 07 Apr 2009 15:00:00 EST. Please see our terms for use of feeds.

Continue reading SEC fields naked short selling complaints

SEC fields naked short selling complaints originally appeared on BloggingStocks on Thu, 19 Mar 2009 17:20:00 EST. Please see our terms for use of feeds.

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Continue reading Hedge Fund Apocalypse: Massive short squeeze on Citi could wipe out dinosaur funds

Hedge Fund Apocalypse: Massive short squeeze on Citi could wipe out dinosaur funds originally appeared on BloggingStocks on Thu, 19 Mar 2009 16:40:00 EST. Please see our terms for use of feeds.