Shorting These Stocks is Now Verboten

For all who wonder which shares are being geared for the next invisible hand lift off, I present an email distributed earlier today by CMC Markets, which is one of the main spread betting providers in the United Kingdom, to its clients. If certain individuals at Morgan Stanley’s exchange traded fund and quant trading operations want to opine as to the insaneness of the current hard to borrow nature of these stocks, now is the time to speak up (oh wait, curiously Morgan Stanley itself is in the Do Not Short list…erm…kinda odd that, is it not?).

Which brings up the question: who exactly is it that sets the availability of borrowable shares or the cost of borrow? Is it the custodians, the State Streets and The BONYs, who as we know are highly conflicted and have every interest in pushing stock prices higher, or is the prime broker repo desks: the Goldmans and the Morgans (both JP and Stanley) of the world? Inquiring minds want to know just who is making shorting impossible these days.

Short Selling Update

‘Due to significant increases in the cost of borrowing stock in the underlying market, along with a lack of available shares to borrow, we have been forced to restrict short selling on the following US Shares’

‘Clients are not allowed to open any new short positions or increase any short positions in these instruments. If you currently hold an open short position, you are not forced to close this and if you need to sell in order to close a long position your order will be accepted.’

Thoughts of a blogger: You can apply red thumbs to all these, IMO, they have been rigged to rise by more illegal interventions in the market…

Tags: CMC Markets, short selling, shorting, spread betting, stocks

This entry was posted on Monday, May 25th, 2009 at 12:11 pm and is filed under Industry Happenings, Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.