Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] New NASD trading restrictions?
Date: Sun, 16 Mar 2003 05:43:29 -0500
Previous Article (by Author): Re: [CANSLIM] Worley's Weekend Weeview - MVL "Tom Worley"
Top of Thread: [CANSLIM] New NASD trading restrictions? "Jerome Buckmelter"
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Jerome, I am not aware of such a new rule, but I have heard this claim =
before on occasion over the years. The rule is, you must have settled =
funds on settlement day to pay for a purchase. How those funds get there =
is of no concern. If sufficient funds are available on settlement day as =
a result of a sale, the sale was done the same day as the purchase, AND =
the settlement cycle is the same for both the buy and the sale, then you =
are covered.
I have heard of other brokers trying to apply this rule to trades done =
in a cash acct. With business so slow these days, I don't know why =
anyone would do so.=20
I would suggest calling Ameritrade and try to get a different =
supervisor. If they say the same thing, ask them to email you this new =
rule and send it to me / the group to review. My suspicion is that this =
is an Ameritrade internal policy at best, and an employee's ignorance =
possibly as well.
If it is an Ameritrade policy, then you may be able to resolve it just =
by doing your trades on margin.
Then again, maybe I have not kept up with the rules and need to be =
educated, but I don't see NASD enacting such a rule, especially at a =
time like this when business is slow. But I took a look at "What's New" =
at the NASDR site, and saw no mention of this.
- ----- Original Message -----=20
From: Jerome Buckmelter=20
To: CANSLIM LIST=20
Sent: Sunday, March 16, 2003 12:54 AM
Subject: [CANSLIM] New NASD trading restrictions?
I recognize that this post does not specifically deal with CANSLIM, but =
it could affect a lot of CANSLIM traders if it is true. Ameritrade =
Client Services staff, including a supervisor, told me this evening that =
a new (as of March 13) NASD interpretation of a Federal Reserve rule =
prevents investors from using proceeds from the sale of stock to =
purchase new stock until the sale settles. That means three days!! I =
spent twenty minutes discussing with the supervisor the lunacy of an =
interpretation such as this, but he insisted that it was true. He says =
it comes from the NASD, not Ameritrade. That means one cannot be fully =
invested - during a bull market, of course - and sell a slower =
performing stock in favor of one that is breaking out on the same day. =
You will need to wait three days until the sale settled before buying =
the break out!! I checked the NASD website and couldn't find any =
information on this, which makes me suspicious. I also talked to two =
different people at Schwab, and they never heard of this ruling. The =
Ameritrade people say that they are already complying with this new =
ruling, and that other brokers will need to do the same soon. Has =
anyone else heard of this? What can be done? Any suggestions or =
comments? =20
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<DIV><FONT face=3DArial>Jerome, I am not aware of such a new rule, but I =
have=20
heard this claim before on occasion over the years. The rule is, you =
must have=20
settled funds on settlement day to pay for a purchase. How those funds =
get there=20
is of no concern. If sufficient funds are available on settlement day as =
a=20
result of a sale, the sale was done the same day as the purchase, AND =
the=20
settlement cycle is the same for both the buy and the sale, then you are =
covered.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I have heard of other brokers trying to apply =
this rule to=20
trades done in a cash acct. With business so slow these days, I don't =
know why=20
anyone would do so. </FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>I would suggest calling Ameritrade and try to =
get a=20
different supervisor. If they say the same thing, ask them to email you =
this new=20
rule and send it to me / the group to review. My suspicion is that this =
is an=20
Ameritrade internal policy at best, and an employee's ignorance possibly =
as=20
well.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>If it is an Ameritrade policy, then you may be =
able to=20
resolve it just by doing your trades on margin.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Then again, maybe I have not kept up with the =
rules and=20
need to be educated, but I don't see NASD enacting such a rule, =
especially at a=20
time like this when business is slow. But I took a look at "What's New" =
at the=20
NASDR site, and saw no mention of this.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Djsjbuck@myexcel.com href=3D"mailto:jsjbuck@myexcel.com">Jerome=20
Buckmelter</A> </DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">CANSLIM LIST</A> </DIV>
<DIV><B>Sent:</B> Sunday, March 16, 2003 12:54 AM</DIV>
<DIV><B>Subject:</B> [CANSLIM] New NASD trading =
restrictions?</DIV></DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">I recognize that this post =
does not=20
specifically deal with CANSLIM, but it could affect a lot of CANSLIM =
traders if=20
it is true. <SPAN style=3D"mso-spacerun: yes"> </SPAN>Ameritrade =
Client=20
Services staff, including a supervisor, told me this evening that a new =
(as of=20
March 13) NASD interpretation of a Federal Reserve rule prevents =
investors from=20
using proceeds from the sale of stock to purchase new stock until the =
sale=20
settles.<SPAN style=3D"mso-spacerun: yes"> </SPAN>That means three =
days!!<SPAN style=3D"mso-spacerun: yes"> </SPAN>I spent twenty =
minutes=20
discussing with the supervisor the lunacy of an interpretation such as =
this, but=20
he insisted that it was true.<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>He=20
says it comes from the NASD, not Ameritrade.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>That means one cannot be fully =
invested=20
=96 during a bull market, of course =96 and sell a slower performing =
stock in favor=20
of one that is breaking out on the same day.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>You will need to wait three =
days until=20
the sale settled before buying the break out!!<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>I checked the NASD website and =
couldn=92t=20
find any information on this, which makes me suspicious.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>I also talked to two different =
people at=20
Schwab, and they never heard of this ruling.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>The Ameritrade people say that =
they are=20
already complying with this new ruling, and that other brokers will need =
to do=20
the same soon.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Has anyone =
else=20
heard of this?<SPAN style=3D"mso-spacerun: yes"> </SPAN>What can =
be=20
done?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Any suggestions or=20
comments?<SPAN style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: =
yes"> </SPAN><o:p></o:p></SPAN></FONT></P></DIV></BODY></HTML>
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Previous Article (by Author): Re: [CANSLIM] Worley's Weekend Weeview - MVL "Tom Worley"
Top of Thread: [CANSLIM] New NASD trading restrictions? "Jerome Buckmelter"
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