Comments on: The Short Selling Ban - Regulator Legal Liability? http://www.marclehmann.net/2008/09/the-short-selling-ban-regulator-legal-liability/ Marc Lehmann's Blog Thu, 11 Mar 2010 18:11:35 +0000 hourly 1 By: Marc http://www.marclehmann.net/2008/09/the-short-selling-ban-regulator-legal-liability/comment-page-1/#comment-940 Marc Fri, 26 Sep 2008 22:30:00 +0000 http://www.marclehmann.net/?p=198#comment-940 We closed all our CFD positions back in April. We were up 27% since Jan1 for the year on our model trading and we decided with the recession/depression risk our capital would be better in the business. For me this is all about a step backwards in market development, that's the crux of my worry. Heh we are due for a Laksa! We closed all our CFD positions back in April. We were up 27% since Jan1 for the year on our model trading and we decided with the recession/depression risk our capital would be better in the business. For me this is all about a step backwards in market development, that’s the crux of my worry.

Heh we are due for a Laksa!

]]> By: Sean Carmody http://www.marclehmann.net/2008/09/the-short-selling-ban-regulator-legal-liability/comment-page-1/#comment-939 Sean Carmody Fri, 26 Sep 2008 22:04:29 +0000 http://www.marclehmann.net/?p=198#comment-939 Marc: thanks for the link! As I understand it, the exemption that allows options market makers to short sell for hedging purposes does not apply to CFD brokers. This means that if a client wants to close out a long CFD position and the broker has it hedged with other CFDs rather than stock, the broker may be unable to close out the risk. Hence "phone trades only". If you were stuck with a long CFD position that you couldn't close out, I can't imagine you'd be too keen on using CFDs again in the future. I can't help thinking that this does not bode too well for the future of the CFD market. Marc: thanks for the link! As I understand it, the exemption that allows options market makers to short sell for hedging purposes does not apply to CFD brokers. This means that if a client wants to close out a long CFD position and the broker has it hedged with other CFDs rather than stock, the broker may be unable to close out the risk. Hence “phone trades only”. If you were stuck with a long CFD position that you couldn’t close out, I can’t imagine you’d be too keen on using CFDs again in the future. I can’t help thinking that this does not bode too well for the future of the CFD market.

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