uptick rule

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Uptick rule

SEC rule that selling short is allowed only on an up tick.

Rule 10a-1

An SEC rule that formerly prohibited a short sale except on a plus tick or a zero plus tick. That is, Rule 10a-1 disallowed short sales at a price below the price at which the security traded most recently. This rule was intended to prevent short sellers from artificially deflating a security's price so that it harmed other investors. It was also called the uptick rule. It was replaced by Regulation SHO in 2007. Some have argued for its reintroduction.

uptick rule

An SEC rule that prohibits the sale of borrowed stock when the last price change in the stock was downward. Part of the Securities Exchange Act of 1934, the uptick rule is designed to keep investors from manipulating stock prices downward by borrowing and selling shares in a declining stock. See also short sale.
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The uptick rule should come back," wrote Howard Ward, portfolio manager for the Gamco Growth Fund, in a letter to the SEC.
Rule 201 was implemented without a pilot study, unlike the repeal of the previous uptick rule in 2007.
Duration of Price Test Restriction : Once the circuit breaker has been triggered, the alternative uptick rule would apply to short sale orders in that security for the remainder of the day as well as the following day;
We are also aware that it has been argued that there would have been less volatility had the uptick rule been kept.
The SEC says it "particularly seeks comments on the alternative uptick rule as a permanent market-wide approach, as well as whether the alternative uptick rule should be combined with a circuit breaker approach.
The uptick rule stated that a short sale could only be sold at price higher than the previous sale, thus ensuring an uptick on the stock price.
Along with the shrinking investment universe, poor returns and the problems with the uptick rule, that was enough to persuade us to drop the strategies from our portfolio in mid-1992.