By Alex Bylund
Currently at Washington and Lee School of Law
I had the great privilege of completing a Plan B research paper under the mentorship of Dr. Tyler Brough. I thoroughly enjoyed working with Dr. Brough, and I am confident that my Plan B paper is more technically proficient and better researched than it would have been had I not worked with this discerning, engaged professor.
"He went above and beyond his job as a research advisor to make sure I understood what I was doing wrong, what I needed to do to fix it, and to help me figure out these conclusions on my own." - Alex Bylund, MSFE '12
My project focused on the effect that uptick-based short-sale constraints have on equity markets. First, I studied the effects of the alternative uptick rule in the Glosten-Milgrom model of sequential trading. Then, I studied the univariate and multivariate empirical effects of uptick constraints on pilot stocks designated by the SEC under Regulation: SHO. Finally, I built a Vector Error Correction Model in order to determine whether restraints on short selling led to an increase in pessimistic option activity.
In summary, I found that short-sale constraints interfere with stock prices reflecting actual value. In addition, these short-sale constraints are likely ineffective at preventing sophisticated traders from establishing short positions.
Dr. Brough helped me produce a project that has already caught the eye of both summer employers and law review boards. I also take great personal satisfaction in having produced something I feel is truly excellent, largely thanks to Dr. Brough’s tireless efforts.
Dr. Brough did an excellent job helping me overcome research obstacles. He went above and beyond his job as a research advisor to make sure I understood what I was doing wrong, what I needed to do to fix it, and to help me figure out these conclusions on my own. He displayed almost superhuman patience throughout the length of the project. My experience working with Dr. Brough was one of the best experiences of my academic career at Utah State or anywhere else.