The rule "is not going to mean much to most of the people who are shorting stocks for fundamental reasons," which defines most hedge funds and mainstream short sellers, said Mike Long, partner at Short Alert Research, in Charlotte, N.C. Short sellers, he noted, largely short a stock on strength and buy back the shares on weakness, so they aren't actively selling shares into a falling market—they are buying. During normal market volatility, the rule would affect only a few stocks, according to SEC staffers. During the relatively smooth 2004-06 years, for example, only about 1.3% of stocks hit the 10% threshold on a given day. Oct. 10, 2008, shows where a high-water mark for the rule might be. On that day, 68% of stocks fell more than 10%.
Opinion piece on the ruling — not very favorable