Short-Selling: What You Need to Know Now

On Sept. 18, the Securities and Exchange Commission (SEC) said its ban on the short-selling of hundreds of financial companies would end today, Oct. 2, but could be extended.

It was.

Yesterday, the SEC extended the ban until the third business day after the enactment of the current financial "bailout/rescue" plan before Congress.

Here are a few takes from TheStreet.com on what you need to know about short-selling -- now.

From Jim Cramer's 'Stop Trading!': Thumbs Up to the Uptick Rule:

NYSE head Duncan Niederauer said today that the SEC is considering reinstating the uptick rule. "That would be fabulous," Cramer said. "I hope they don't just do a penny uptick, maybe a nickel or a dime."

Read the full version of Jim Cramer's 'Stop Trading!': Thumbs Up to the Uptick Rule.

TheStreet.com Rewind: The Uptick Rule

Cramer: Uptick Rule Can Help Prevent Crashes (Video, Apr. 7)

Without the uptick rule to slow things down, it is much easier than ever to take a stock and crush it, says Jim Cramer.

To watch the video, click the player below:

Plus, don't miss these related "Wall Street Confidential" videos on TheStreet.com TV: Cramer: Why We Need the Uptick Rule (Apr. 1: The SEC got rid of the uptick rule last summer. That was a big mistake, says Cramer. Legal raiding is important for short-sellers.) and Cramer: Reinstate the Uptick Rule (Mar. 28: Cramer says reintroducing the short-selling uptick rule would help stabilize the banking sector.).

From Cramer: Short-Seller's Paradise:

Nothing from Congress is going to make this market go up. We need the market go up because it is cheap and it attracts buyers, and because there are companies out there that are worth more than they are trading at -- perhaps as private companies, perhaps as investments right now, if anyone had cash and confidence.

Right now it seems there is neither. All we have are the futures, on stocks and on oil, and they bounce around and we do what they tell us at the start. Then the hedge funds come in and start selling because of their broken models and their redemptions. Then the short-sellers come in and figure out ways to knock down things. Then the rumors start about another bank failure and then we go down.

I want to break that spiral because I own stocks. If I am short stocks, I love the spiral.

Now, the bill in Congress does not break the spiral by any means. What breaks the spiral is a sense that the system is not falling apart, which it most certainly is.

Read the full version of Cramer: Short-Seller's Paradise.

From Kass: 11 Ways to Fix the Short Ban:

1. First and foremost, reinstate the uptick rule. This is so fundamental and so obvious it is almost beyond my comprehension why a revision of this rule was not considered first and before the other recommendations were instituted.

2. A timeout on short selling of financial stocks and a brief cooling off period are reasonable, but it should have been focused only on our major financial institutions as contrasted to a broad sweeping policy and commentary that has essentially vilified short-selling. When a General Motors (GM Quote) is added to the SEC ban on short selling because it has a bank stuffed in it, the ban is preposterous. No doubt, if markets continue their descent, companies with captive financing arms -- that is, nearly every manufacturer and retailer -- will request to be exempt from short selling.

Read the full version of Kass: 11 Ways to Fix the Short Ban.

Plus, don't miss:

Kass: Free Market Fraudsters

Kass: Blame the Blamers