Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] New trading restrictions
Date: Mon, 17 Mar 2003 23:36:40 -0500
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Jerome, perhaps you did not understand my prior reply, but the =
attachment you posted from Ameritrade does not prohibit you from buying =
one stock with the proceeds from another sale done the same day. It did =
inform you that your acct was restricted, as I pointed out, if you had =
not done any sales, then that is obviously an error. One thing that did =
occur to me is that you are transferring into Ameritrade an acct from =
another firm. If that acct is already restricted due to a violation of a =
Fed call or Reg T call that was not met, or a sale without paying for =
the purchase, then that restriction travels with the acct on the =
transfer, since that is a Fed Reserve rule, not Ameritrade, nor Schwab.
Once your acct is restricted, then you must have settled funds in order =
to place a new purchase. The restriction lasts for 90 days, and results =
from you having violated the Fed rule requiring you to pay for your =
purchases.
- ----- Original Message -----=20
From: Jerome Buckmelter=20
To: canslim@lists.xmission.com=20
Sent: Monday, March 17, 2003 11:26 PM
Subject: RE: [CANSLIM] New trading restrictions
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!=20
=20
- -----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
=20
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).
=20
Can't speak for any other brokers,
Gene
=20
=20
----- Original Message -----=20
From: Jerome Buckmelter=20
To: 'CANSLIM LIST'=20
Sent: Sunday, March 16, 2003 3:20 PM
Subject: [CANSLIM] New trading restrictions
=20
=20
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 =20
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<DIV><FONT face=3DArial>Jerome, perhaps you did not understand my prior =
reply, but=20
the attachment you posted from Ameritrade does not prohibit you from =
buying one=20
stock with the proceeds from another sale done the same day. It did =
inform you=20
that your acct was restricted, as I pointed out, if you had not done any =
sales,=20
then that is obviously an error. One thing that did occur to me is that =
you are=20
transferring into Ameritrade an acct from another firm. If that acct is =
already=20
restricted due to a violation of a Fed call or Reg T call that was not =
met, or a=20
sale without paying for the purchase, then that restriction travels with =
the=20
acct on the transfer, since that is a Fed Reserve rule, not Ameritrade, =
nor=20
Schwab.</FONT></DIV>
<DIV><FONT face=3DArial></FONT> </DIV>
<DIV><FONT face=3DArial>Once your acct is restricted, then you must have =
settled=20
funds in order to place a new purchase. The restriction lasts for 90 =
days, and=20
results from you having violated the Fed rule requiring you to pay for =
your=20
purchases.</FONT></DIV>
<DIV> </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@lists.xmission.com</A>=
</DIV>
<DIV><B>Sent:</B> Monday, March 17, 2003 11:26 PM</DIV>
<DIV><B>Subject:</B> RE: [CANSLIM] New trading restrictions</DIV></DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Gene, I was =
surprised=20
to hear that Schwab told you that they have the same procedures as =
Ameritrade.=20
<SPAN style=3D"mso-spacerun: yes"> </SPAN>I also have accounts with =
Schwab,=20
and they told me the opposite!<SPAN style=3D"mso-spacerun: yes"> =
</SPAN>They=20
said that I can sell a stock and buy another the same day with the =
proceeds of=20
the first sale, no problem. The Federal Reserve Board emailed me back =
today and=20
stated that =93one can sell a stock and purchase another one the same =
day with the=20
proceeds, provided that one does not intend to sell the second security =
before=20
the purchase settles.=94 <SPAN style=3D"mso-spacerun: =
yes"> </SPAN>I=20
would think that the FRB would have the final word on the matter, but =
can one do=20
to make Ameritrade (and, perhaps, Schwab) comply with the law and the =
FRB=20
interpretation?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Again, I =
think=20
Ameritrade=92s interpretation can really hurt CANSLIM investors =
particularly.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Imagine during a bull market: =
you are=20
fully invested, and you want to sell a slower moving stock, to get into =
one that=20
is breaking out (as WON suggests); well, Ameritrade is insisting that =
you would=20
need to wait three days after the sale in order to re-invest your money =
(and=20
miss the breakout by three days).<SPAN style=3D"mso-spacerun: =
yes"> =20
</SPAN>The easy answer to this is, of course, to convert to a margin=20
account.<SPAN style=3D"mso-spacerun: yes"> </SPAN>But what if your =
account=20
is an IRA or custodial account which is not eligible for a margin =
account?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>What would happen if one =
simply ignored=20
Ameritrade and sold one stock and bought another with the proceeds in =
the same=20
day without waiting three days?<SPAN style=3D"mso-spacerun: yes"> =20
</SPAN>Could they block or rescind your purchase of the breakout =
stock?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Could they freeze you out and =
your=20
account for 90 days?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Put =
you in=20
jail?<SPAN style=3D"mso-spacerun: yes"> </SPAN>Help!=20
<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B><SPAN style=3D"FONT-WEIGHT: bold">On Behalf Of =
</SPAN></B>genr<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> </SPAN></FONT><st1:date =
Year=3D"2003"=20
Day=3D"17" Month=3D"3"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">Monday, March 17,=20
2003</SPAN></FONT></st1:date><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"> </SPAN></FONT><st1:time=20
Minute=3D"16" Hour=3D"10"><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">10:16=20
AM</SPAN></FONT></st1:time><FONT face=3DTahoma size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma"><BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">To:</SPAN></B> =
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [CANSLIM] New =
trading=20
restrictions</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Comic =
Sans MS"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Comic Sans =
MS'">Jerome, I=20
just checked with Schwab and they have the same procedures for =
non-margin=20
accounts. I believe that brokers just want to get paid (interest) =
for=20
lending you (us) money and suggest using a margin account if additional =
funds=20
are required to make a trade. The IRA accounts require money to be =
in the=20
account prior to an order (no=20
margin).</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Comic =
Sans MS"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Comic Sans =
MS'">Can't speak=20
for any other brokers,</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Comic =
Sans MS"=20
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Comic Sans =
MS'">Gene</SPAN></FONT><o:p></o:p></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"> <o:p></o:p></SPAN></FONT></P></DIV>
<BLOCKQUOTE=20
style=3D"BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: =
medium none; PADDING-LEFT: 4pt; PADDING-BOTTOM: 0in; MARGIN: 5pt 0in 5pt =
3.75pt; BORDER-LEFT: black 1.5pt solid; PADDING-TOP: 0in; BORDER-BOTTOM: =
medium none">
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">----- Original Message =
- -----=20
<o:p></o:p></SPAN></FONT></P></DIV>
<DIV style=3D"font-color: black">
<P class=3DMsoNormal style=3D"BACKGROUND: #e4e4e4; MARGIN-LEFT: =
0.5in"><B><FONT=20
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">From:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Djsjbuck@myexcel.com href=3D"mailto:jsjbuck@myexcel.com">Jerome =
Buckmelter</A> <o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT =
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">To:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> <A=20
title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">'CANSLIM LIST'</A>=20
<o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT =
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Sent:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">=20
</SPAN></FONT><st1:date Year=3D"2003" Day=3D"16" Month=3D"3"><FONT =
face=3DArial=20
size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Sunday, =
March 16,=20
2003</SPAN></FONT></st1:date><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial"> </SPAN></FONT><st1:time =
Minute=3D"20" Hour=3D"15"><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">3:20=20
PM</SPAN></FONT></st1:time><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><B><FONT =
face=3DArial size=3D2><SPAN=20
style=3D"FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: =
Arial">Subject:</SPAN></FONT></B><FONT=20
face=3DArial size=3D2><SPAN style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"> [CANSLIM]=20
New trading restrictions<o:p></o:p></SPAN></FONT></P></DIV>
<DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: =
12pt"><o:p> </o:p></SPAN></FONT></P></DIV>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Tom=20
Worley,<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DArial =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Thank you for your =
input.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>I followed your advice, and =
called=20
Ameritrade requesting that they email me the new rule.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>It is attached.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>This is a =93canned=94 =
response: It says,=20
=93Our records indicate that you have recently sold securities in your =
account=20
prior to making full cash payment=85=94 even though I am a new =
Ameritrade customer=20
and have never placed any orders with them yet.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>In contrast to my =
earlier=20
discussions with Ameritrade, this new ruling does not appear to be =
from the=20
NASD as they claimed, but rather from the staff of the Board of =
Governors of=20
the Federal Reserve System as they now claim per the attachment.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>This =93new rule=94 is =
further disturbing=20
since the only alternative is to have a margin account which is not, =
according=20
to the attachment, permitted for IRA=92s and custodial accounts.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>This could be devastating =
for us who=20
are using the canslim system to build our retirement account.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>We will be forced to keep a =
large=20
portion of our account in cash during a bull market in anticipation of =
a break=20
out or we could be fully invested and miss every breakout by three =
days, after=20
the sale settles.<SPAN style=3D"mso-spacerun: yes"> </SPAN>I =
guess the=20
main questions are:<SPAN style=3D"mso-spacerun: yes"> </SPAN>is =
this just=20
an Ameritrade internal policy as you suspected?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Will other brokerages =
follow=20
suit?<SPAN style=3D"mso-spacerun: yes"> </SPAN>What do you -- =
and the=20
other canslimers -- think should be done about this onerous =
restriction?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Again, Tom, thanks for all =
your=20
help.<SPAN style=3D"mso-spacerun: yes"> </SPAN>Jerome<SPAN=20
style=3D"mso-spacerun: yes"> =20
</SPAN><o:p></o:p></SPAN></FONT></P></BLOCKQUOTE></DIV></BODY></HTML>
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