New Web Site For Short Sellers

Posted by Bull Bear Trader | 8/18/2008 07:08:00 AM | , , | 3 comments »

Former SEC Chairman, Harvey Pitt, has teamed up with two others to create a web site that provides a real-time electronic stock lending and location service to help sellers and brokerage firms comply with SEC rules on naked short selling. The SEC recently limited the practice for 19 of the larger financial institutions, and there is an expectation the order will increase to more stocks. The web site, called RegSHO.com, matches traders with stock available for borrowing for short sales and provides data on the short-sell market. The creators of the web site believe it will help sellers reduce their costs because transactions are done electronically, and not over the phone as is still often the case. The site also helps to alert subscribers to any possible compliance problems they may be encountering, as well as offering advice and solutions. Access is also given to LocateStock.com, providing a real-time lending and borrow marketplace specializing in hard-to-borrow stocks, and Buyins.net, which helps to identify the demand for borrowed stocks. As mentioned in the Washington Post article, other companies that offer similar services include ShortSqueeze.com and Stock-Borrow.com. What's the kicker? Clients to the RegSHO.com site pay a monthly fee of $995 for standard access, along with an additional per-share fee for locating stock. New regulation? No worry. We can solve your problem ...... for a fee of course. You have to love capitalism.

3 comments

  1. GS751 // August 18, 2008 at 6:02 PM

    Nice post, even a bloomberg terminal has delayed things on short interest. For a long position it takes 3 days to clear through the houses or until you actually own the stock. For a short position I am not sure I think 2 - 3 days.

    I have this wackey theory if there gonna be a strong day in the markets it is tuesday, because it is when the prime brokers cover their shorts so they don't have to pay the interest over the weekend.

  2. GS751 // August 18, 2008 at 6:02 PM

    I just added your site to my blog Roll. www.thevolatilitysoma.blogspot.com

  3. Bull Bear Trader // August 18, 2008 at 9:16 PM

    Thanks for the comments. Interesting theory. Might be worth looking into for highly shorted stocks. Thanks also for the blogroll addition. I will check out your site as well.