Go to Jeff Salisbury LWGate Home Page.From: "Jerome Buckmelter" <jsjbuck@myexcel.com>
Subject: RE: [CANSLIM] New trading restrictions
Date: Mon, 17 Mar 2003 20:26:40 -0800
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Gene, I was surprised to hear that Schwab told you that they have the
same procedures as Ameritrade. I also have accounts with Schwab, and
they told me the opposite! They said that I can sell a stock and buy
another the same day with the proceeds of the first sale, no problem.
The Federal Reserve Board emailed me back today and stated that "one can
sell a stock and purchase another one the same day with the proceeds,
provided that one does not intend to sell the second security before the
purchase settles." I would think that the FRB would have the final
word on the matter, but can one do to make Ameritrade (and, perhaps,
Schwab) comply with the law and the FRB interpretation? Again, I think
Ameritrade's interpretation can really hurt CANSLIM investors
particularly. Imagine during a bull market: you are fully invested, and
you want to sell a slower moving stock, to get into one that is breaking
out (as WON suggests); well, Ameritrade is insisting that you would need
to wait three days after the sale in order to re-invest your money (and
miss the breakout by three days). The easy answer to this is, of
course, to convert to a margin account. But what if your account is an
IRA or custodial account which is not eligible for a margin account?
What would happen if one simply ignored Ameritrade and sold one stock
and bought another with the proceeds in the same day without waiting
three days? Could they block or rescind your purchase of the breakout
stock? Could they freeze you out and your account for 90 days? Put you
in jail? Help!
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of genr
Sent: Monday, March 17, 2003 10:16 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] New trading restrictions
Jerome, I just checked with Schwab and they have the same procedures for
non-margin accounts. I believe that brokers just want to get paid
(interest) for lending you (us) money and suggest using a margin account
if additional funds are required to make a trade. The IRA accounts
require money to be in the account prior to an order (no margin).
Can't speak for any other brokers,
Gene
- ----- Original Message -----
From: Jerome Buckmelter <mailto:jsjbuck@myexcel.com>
To: 'CANSLIM <mailto:canslim@lists.xmission.com> LIST'
Sent: Sunday, March 16, 2003 3:20 PM
Subject: [CANSLIM] New trading restrictions
Tom Worley,
Thank you for your input. I followed your advice, and called Ameritrade
requesting that they email me the new rule. It is attached. This is a
"canned" response: It says, "Our records indicate that you have recently
sold securities in your account prior to making full cash payment." even
though I am a new Ameritrade customer and have never placed any orders
with them yet. In contrast to my earlier discussions with Ameritrade,
this new ruling does not appear to be from the NASD as they claimed, but
rather from the staff of the Board of Governors of the Federal Reserve
System as they now claim per the attachment. This "new rule" is further
disturbing since the only alternative is to have a margin account which
is not, according to the attachment, permitted for IRA's and custodial
accounts. This could be devastating for us who are using the canslim
system to build our retirement account. We will be forced to keep a
large portion of our account in cash during a bull market in
anticipation of a break out or we could be fully invested and miss every
breakout by three days, after the sale settles. I guess the main
questions are: is this just an Ameritrade internal policy as you
suspected? Will other brokerages follow suit? What do you -- and the
other canslimers -- think should be done about this onerous restriction?
Again, Tom, thanks for all your help. Jerome
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<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Gene, I was surprised to hear that =
Schwab
told you that they have the same procedures as Ameritrade. <span
style=3D'mso-spacerun:yes'> </span>I also have accounts with =
Schwab, and
they told me the opposite!<span style=3D'mso-spacerun:yes'> =
</span>They
said that I can sell a stock and buy another the same day with the =
proceeds of
the first sale, no problem. The Federal Reserve Board emailed me back =
today and
stated that “one can sell a stock and purchase another one the =
same day
with the proceeds, provided that one does not intend to sell the second
security before the purchase settles.” <span
style=3D'mso-spacerun:yes'> </span>I would think that the FRB =
would
have the final word on the matter, but can one do to make Ameritrade =
(and,
perhaps, Schwab) comply with the law and the FRB interpretation?<span
style=3D'mso-spacerun:yes'> </span>Again, I think =
Ameritrade’s
interpretation can really hurt CANSLIM investors particularly.<span
style=3D'mso-spacerun:yes'> </span>Imagine during a bull market: =
you are
fully invested, and you want to sell a slower moving stock, to get into =
one
that is breaking out (as WON suggests); well, Ameritrade is insisting =
that you would
need to wait three days after the sale in order to re-invest your money =
(and
miss the breakout by three days).<span style=3D'mso-spacerun:yes'>
</span>The easy answer to this is, of course, to convert to a margin =
account.<span
style=3D'mso-spacerun:yes'> </span>But what if your account is an =
IRA or
custodial account which is not eligible for a margin account?<span
style=3D'mso-spacerun:yes'> </span>What would happen if one simply =
ignored
Ameritrade and sold one stock and bought another with the proceeds in =
the same
day without waiting three days?<span style=3D'mso-spacerun:yes'>
</span>Could they block or rescind your purchase of the breakout =
stock?<span
style=3D'mso-spacerun:yes'> </span>Could they freeze you out and =
your account
for 90 days?<span style=3D'mso-spacerun:yes'> </span>Put you in =
jail?<span
style=3D'mso-spacerun:yes'> </span>Help! =
<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>genr<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> =
</span></font><st1:date
Month=3D"3" Day=3D"17" Year=3D"2003"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:
10.0pt;font-family:Tahoma'>Monday, March 17, =
2003</span></font></st1:date><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'> </span></font><st1:time
Hour=3D"10" Minute=3D"16"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;
font-family:Tahoma'>10:16 AM</span></font></st1:time><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'><br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
New trading
restrictions</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Comic Sans MS"><span
style=3D'font-size:12.0pt;font-family:"Comic Sans MS"'>Jerome, I just =
checked
with Schwab and they have the same procedures for non-margin accounts. I
believe that brokers just want to get paid (interest) for lending =
you (us)
money and suggest using a margin account if additional funds are =
required to make
a trade. The IRA accounts require money to be in the =
account prior
to an order (no margin).</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Comic Sans MS"><span
style=3D'font-size:12.0pt;font-family:"Comic Sans MS"'>Can't speak for =
any other
brokers,</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Comic Sans MS"><span
style=3D'font-size:12.0pt;font-family:"Comic Sans =
MS"'>Gene</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<blockquote style=3D'border:none;border-left:solid black =
1.5pt;padding:0in 0in 0in 4.0pt;
margin-left:3.75pt;margin-top:5.0pt;margin-right:0in;margin-bottom:5.0pt'=
>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>----- Original Message =
- ----- <o:p></o:p></span></font></p>
</div>
<div style=3D'font-color:black'>
<p class=3DMsoNormal =
style=3D'margin-left:.5in;background:#E4E4E4'><b><font size=3D2
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>From:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:jsjbuck@myexcel.com" title=3D"jsjbuck@myexcel.com">Jerome =
Buckmelter</a>
<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>To:</span><=
/font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">'CANSLIM
LIST'</a> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Sent:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:date
Month=3D"3" Day=3D"16" Year=3D"2003"><font size=3D2 face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial'>Sunday, March 16, =
2003</span></font></st1:date><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:time
Hour=3D"15" Minute=3D"20"><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>3:20 PM</span></font></st1:time><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p></o:p></span></font></p=
>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Subject:</s=
pan></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> [CANSLIM]
New trading restrictions<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Tom =
Worley,<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Thank you for your =
input.<span
style=3D'mso-spacerun:yes'> </span>I followed your advice, and =
called
Ameritrade requesting that they email me the new rule.<span
style=3D'mso-spacerun:yes'> </span>It is attached.<span
style=3D'mso-spacerun:yes'> </span>This is a “canned” =
response:
It says, “Our records indicate that you have recently sold =
securities in
your account prior to making full cash payment…” even though =
I am a
new Ameritrade customer and have never placed any orders with them =
yet.<span
style=3D'mso-spacerun:yes'> </span>In contrast to my earlier
discussions with Ameritrade, this new ruling does not appear to be from =
the
NASD as they claimed, but rather from the staff of the Board of =
Governors of
the Federal Reserve System as they now claim per the attachment.<span
style=3D'mso-spacerun:yes'> </span>This “new rule” is =
further
disturbing since the only alternative is to have a margin account which =
is not,
according to the attachment, permitted for IRA’s and custodial
accounts.<span style=3D'mso-spacerun:yes'> </span>This could be =
devastating
for us who are using the canslim system to build our retirement =
account.<span
style=3D'mso-spacerun:yes'> </span>We will be forced to keep a =
large
portion of our account in cash during a bull market in anticipation of a =
break
out or we could be fully invested and miss every breakout by three days, =
after
the sale settles.<span style=3D'mso-spacerun:yes'> </span>I guess =
the main
questions are:<span style=3D'mso-spacerun:yes'> </span>is this =
just an
Ameritrade internal policy as you suspected?<span
style=3D'mso-spacerun:yes'> </span>Will other brokerages =
follow
suit?<span style=3D'mso-spacerun:yes'> </span>What do you -- and =
the other
canslimers -- think should be done about this onerous restriction?<span
style=3D'mso-spacerun:yes'> </span>Again, Tom, thanks for all your
help.<span style=3D'mso-spacerun:yes'> </span>Jerome<span
style=3D'mso-spacerun:yes'> =
</span><o:p></o:p></span></font></p>
</blockquote>
</div>
</body>
</html>
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