Registered User
Joined: 1/19/2008
Posts: 23
|
Went to the proshares website to see how the new rules against shorting will affect SKF, the Ultra Short ETF they manage. Trading had been halted for a period Friday morning and later resumed.
This is what proshares had by means of explanation:
Bethesda, MD, September 19, 2008 – Due to the emergency action announced by the Securities and Exchange Commission on September 18, 2008, temporarily prohibiting short sales of shares of certain financial companies, Short Financials ProShares (SEF) and UltraShort Financials ProShares (SKF) are not expected to accept orders from Authorized Participants to create shares until further notice. Unless notified otherwise, shares will be available for redemption by Authorized Participants as normal. The shares of these ProShares are expected to trade in the financial markets today, but may trade at prices that are not in line with their intraday indicative values.
My understanding is that SKF doesn't short shares directly , it does so through derivative positions, and so, I believe SKF will be a way to initiate a short position for those who want one. However, I'm not fully clear on how the SEC rule against will affect this ETF and proshares didn't offer much in their explanation. Anyone have a clear understanding or link to an explanation of how SKF will be affected?
Thanks,
cgrey2
|
Registered User
Joined: 1/19/2008
Posts: 23
|
Based on today's trading, SKF's movement is no longer inversely correlated with UYG on a 1 to 1 basis.
|
Registered User
Joined: 9/25/2007
Posts: 1,506
|
Perhaps the short selling ban will do for the broader market ... what it did for Fannie & Freddie ...
If you can't sell short today ... will you be able to sell at all tomorrow ?
|
Registered User
Joined: 2/5/2006
Posts: 1,148
|
i wouldn't count on the ban being lifted october 2nd.
i think shorting via puts might be better.
|