I told you so : SKF halted trading

Previously I said that some kind of options market related accident will occur. ("with so many planes in the air, a collision is inevitable")

SKF was halted on friday because of the new short rules. Finally I figured out a bit more of how the internals work on these gadgets.

http://news.morningstar.com/articlenet/article.aspx?id=253823&pgid=rss

ProShares does not buy or short shares, they trade only in options, forwards and futures. So they need counterparties to these agreements, and those counterparties would almost certainly want to actually short the shares to gain the desired effect so that they can fullfil their end of the contract. So at the moment nobody can do that (especially GS MS MER show are ...whoops... were the primary writers/buyers of these contracts).

This means that when I scalp the frakking QID I am having no actual effect on the marketplace. You know I'm really concerned that my little 100 shares should stand up and say (as in a democracy) "you suck!" and everybody watching their screens would see the cumulative emotional cry of the land and the market will have spoken.

but no, it doesn't work like that. Everything is distributed in time in uneven ways through layers and layers of derivitives. So often times its these layers of obligations that occasionally burp because they have to and then stupid shit happens like buying up the financials as though the nightmare was over.