Short selling constraint and options markets

Stochastix · September 19th, 2008, 12:44 pm

Any thoughts on the impacts? Dynamic hedgers will not want to bid for calls or offer puts....

daveangel · September 19th, 2008, 12:54 pm

yes true but I thought market makers were exempt

Stochastix · September 19th, 2008, 12:58 pm

Here is the excerpt from the SEC release:"Finally, to facilitate the expiration of options on September 20th, options market makers are excepted from the requirements of this Order until 11:59 p.m. on September 19th when selling short as part of bona fide market making and hedging activities related directly to bona fide market making in derivatives on the publicly traded securities of any Included Financial Firm."So they are exempt only up to midnight. Starting Monday, they will not be able to go short stocks....

TraderJoe · September 19th, 2008, 5:24 pm

So no puts?