Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Saturday, September 20, 2008

Up-Tick Rule... Or is it UPTICK rule

I came up with one of my ideas. I'm going to have to send it to my legislators. If you think it's a good one, maybe you could too.

What we need isn't the uptick rule, we need a +5 or +10 uptick rule.

When the "Academics" that the SEC had a study done of the affect of the uptick rule, What they didn't realize was, that Back when the Uptick Rule was effective We traded in 1/16 Sizes.

When they did the study we had switched to .01, or 1 Cent sizes, and not the .08 sizes or 1/16 of a dollar. The Volatility was already in the market. Because we had increased it by a magnitude of 8 or 10 by allowing 100 ticks per dollar, instead of 16.

When they did the study, 100 ticks per dollar, made little difference in slowing volatility, since there were 10 Times as many ticks.

I'm still trying to get my head around how it would work... Would you need a series of 10 + ticks? or maybe a Plus tick over the course of 1 minute, or 10 seconds. Maybe there are better variations.

But That would reduce the Volatility. We don't need the uptick rule back, what we need is the uptick Rule increased by a magnitued of 8 or 10

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