Post by Victor VVV on Jan 29, 2020 16:43:28 GMT -5
How to Trade Stocks with Short Sale Restrictions (SSR)
July 29, 2019 by Nick P
The short sale rule is one of the most pointless rules in the stock market. But you have to
understand what it is as an active stock trader, as it has a big effect on how a stock trades
once it gets triggered. Today we will talk about what SSR is, how stocks tend to move with
short sale restrictions and some tricks for successfully trading stocks with SSR on:
What is the Short Sale Rule(SSR)
The short sale rule (SSR) is triggered when a stock goes down more than 10% from its prior
close. SSR remains on a stock for the rest of the trading day when it’s triggered and remains
on for the following trading day as well!
The SEC made this rule to prevent short sellers causing a stock to tank. All it really does it
make it difficult to short. The people who want to short are still going to short the stock.
A stock having short sale restriction just does not always affect the probability of the stock going
up and down. Do not buy a stock just because it has short-sell restrictions on.
The exception for that rule is in small-cap stocks, as these can be manipulated easier due to their
lower float. It is much for a 3 million share $5 stock to drop 50 cents than it is for Netflix to drop
$30-$40 a share. Strong, uptrending, low-float stocks + SSR can be the recipe for a big squeeze.
A stock will have an “SSR” on the Level 2 montage in the top right. See the example below:
Trading Stocks with SSR
Stocks with short sale restriction can be tricky to trade to the short-side. A lot of times stocks with
Stocks with short sale restriction can be tricky to trade to the short-side. A lot of times stocks with
bad news will gap down during pre-market and trigger SSR. They will often grind down slowly and
then have big pops, and then continue to fade. They can provide great shorting opportunities, but
you have to have good timing
The number one rule for trading stocks with SSR: Don’t short them at lows. They will either flush
The number one rule for trading stocks with SSR: Don’t short them at lows. They will either flush
and not fill you, or they will usually have a big pop, and you are stuck with a bad entry. You want
to wait for a spike to get a good entry with better risk vs reward.
Getting the Right Entry
One of the biggest difficulties with SSR is that if you want to short them, it can be hard to enter,
One of the biggest difficulties with SSR is that if you want to short them, it can be hard to enter,
cause you need the stock to an uptick in order to fill you. As a result, you need to wait for the stock
to pop a bit in order to get filled. You have to be strategic about where you place your orders to get
filled, especially if there is a spread.
Use the VWAP and moving averages to get filled on these names, or try to get filled when they are
Use the VWAP and moving averages to get filled on these names, or try to get filled when they are
consolidating in a bear flag. When a stock is trading in a range, that can give you the uptick you
need to get filled. I recently traded a few stocks last week with SSR. I did a market recap recently
where I breakdown how I traded them in more detail (talk about it at 10:00):
Market Recap | How To Analyze Sentiment In A Stock
Bulls on Wall Street
64.1K subscribers
64.1K subscribers
Comments:
Creator Learn
6 months ago
Great video. please explain what SSR is
( Video Time: 10:17 to 10:33 ) Thanks
Bulls on Wall Street
6 months ago
Yo! SSR is short for "Short-Sale Restriction". It gets triggered when a stock goes
6 months ago
Yo! SSR is short for "Short-Sale Restriction". It gets triggered when a stock goes
down more than 10% during the trading day, and prevents anyone from short-selling
stocks on the bid, meaning you have to wait for the stock to uptick to fill a short
position on the stock.
Ethan Luo
5 months ago
it is a rule that disallow short sell of a stock
Pursuit of freedom
5 months ago
Kunal you are 1 of the best traders ive seen. True traders master and are comforatble trading
both directions. Im trying to get like you.
3 months ago
how do i gain access to discord chat?
Bulls on Wall Street
1 month ago
hey you can get it on the bullsonwallstreet.com just go on the live chat! my guy kevin will hook you up
man tron
6 months ago
$smsi tricked me out after the first 15 min rang broke down. this stock was what I call a reversal breakout
Bulls on Wall Street
6 months ago
It was a tricky trader! Not your typical junk small-cap company. Waited all day to breakout and start a trend
6 months ago
It was a tricky trader! Not your typical junk small-cap company. Waited all day to breakout and start a trend
man tron
6 months ago
@bulls on Wall Street I would of got back in at 5 but im working with a small account. learning
6 months ago
@bulls on Wall Street I would of got back in at 5 but im working with a small account. learning
some set ups u teach has helped a lot! range brake outs and my favorite is premarket brake outs