Day 67 | Monday, Apr 25
What you CANNOT MISS today - not much
1. China's 2 commodities exchange announced to raise margin requirements on futures contracts of cotton and thermal coal, following similar moves in steel rebar and iron ore earlier
What you may WISH TO KNOW today
1. Dalian Wanda suspended amid privatization talks
2. Australia and New Zealand closed for holiday
Day 68 | Tuesday, Apr 26
What you CANNOT MISS today - not much
1. Local media reported that NDRC & NEA are looking to limit the upscale in thermal IPPs
What you may WISH TO KNOW today
1. Macau gaming name Sands to delay opening of Parisan to year end
2. Indonesia banks under pressure as one of them cut SME loan interest rate
Day 69 | Wednesday, Apr 27
What you CANNOT MISS today
1. Big miss in Australia's 1Q CPI, +1.3% y/y vs. +1.7% est., pressure on AUD, down nearly 2%
2. China increased retail price for oil products for the first time thus year as crude oil price moved above the price floor of US$40/barrel
What you may WISH TO KNOW today
1. Apple suppliers moved marginally lower after Apple reported disappointing sales and earnings numbers overnight, Apple -8% in after market
Day 70 | Thursday, Apr 28
What you CANNOT MISS today
1. BOJ surprised by leaving policy unchanged while market has been pricing in for more stimulus, Nikkei -3.6% and JPY +3%; exporters -4%
What you may WISH TO KNOW today
1. The steel billet average selling price in Tangshan city dropped 9% in 3 days, signaling weakness in steel demand
Day 71 | Friday, Apr 29
What you CANNOT MISS today- nil
What you may WISH TO KNOW today
1. China April manufacturing PMI coming up over the weekend
2. Gold miners moved higher amid gold price movement
3. Japan holiday
Question of the week
What is uptick rule? How does that impact shortselling?
Answer:
The uptick rule is a trading restriction that states that short selling a stock is only allowed on an uptick, whereas uptick is defined as the price above the last traded price of the security, or at the last traded price when the most recent movement between traded prices was upward (i.e. the security has traded below the last-traded price more recently than above that price).
Given a liquid and narrow-spread stock, a lot of times the uptick price is equivalent to the price at best offer, so short selling orders cannot cross the spread (i.e. hit the bid) to trade but wait on the offer side.
The rule went into effect in the US in 1938. It was removed in 2007 and reintroduced in 2009. The rule in Hong Kong was established after 1997 Asia Financial Crisis. Uptick rule also applies in a number of market including Korea and Malaysia, while the rule exists in Japan but only gets triggered on a single stock when its stock price dropped more than 10% on the day.
Short selling generally becomes more difficult as it can only be traded when the buyers are willing to lift the offers. In that case, it removes some direct impact to the stock price compared to long selling which can go all the way down. This will somehow make the fall in stock price slower and allow more time for the market to react. This is also the intention of the rule.
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